The US dollar was seen trading higher yesterday against most of its counterparts, including the Euro. The Euro also got hit by the disappointing German ZEW economic sentiment, which declined from 29.8 to 27.1. Later, the US retail sales data added fuel to the downside in the pair, followed by the Yellen’s testimony. The EURUSD pair broke an important support area to register a healthy decline yesterday. There was a bullish trend line on the 4 hour chart, which was breached by the Euro sellers, as the pair traded below the 1.3580 level.
The most important point was that the pair also broke the 50% fib level of the last move higher from the 1.3503 low to 1.3699 high, and the 200 simple moving average on the 4 hour chart. This signifies a break of the recent uptrend in the EURUSD pair, which might take the pair towards the last low of 1.3500 level. It is possible that the pair might correct higher from the current levels, but if it does so, then it could be seen as a selling opportunity. The Euro sellers are likely to reappear around the broken trend line and the 200 SMA (4H) confluence area.
Moreover, it is also possible that the pair fails to retrace substantially from the current levels, and continue heading lower. Immediate resistance can be seen around the 1.3580 level, followed by the 1.3600-10 resistance area.
So, as long as the pair is trading below the broken trend line and the 200 SMA, then selling rallies might be a good option in the short term. The US Producer Price Index (PPI) data will be released by the US Bureau of Labor Statistics later today, which can cause swing moves in the pair.
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GOLD traded higher for a couple of weeks earlier, but during this week the precious metal struggled to hold the ground, as the US dollar was seen gaining momentum against almost all major currencies. GOLD started the downside ahead of the Fed’s Yellen speech and continued its decline after the speech as well. There was an expanding triangle formed on the 4 hour chart for GOLD, which was breached by sellers earlier during this week. This particular break can be considered as very important, as GOLD was continuously finding buyers around the mentioned triangle support trend line.
After GOLD broke the triangle support trend line it fell towards the 38.2% fib level of the last move higher from the $1240 low to $1345 high. It managed to climb back up, but found sellers around the broken triangle trend line. Later, it fell sharply and traded close to the 50% fib level, which was also coinciding with the 200 moving average on the 4 hour timeframe. So, this support holds a lot of importance for GOLD buyers, and it is very likely that it might rise back towards the $1310 level from the current levels.
The RSI on the 4 hour timeframe seems to be recovering from the extreme levels, which is a positive sign, but it does not mean that the yellow metal can gain momentum easily. The $1310-15 level might act as a strong barrier for GOLD in the short term.
Overall, as long as the prices stay below the mentioned levels, then one might consider selling rallies. However, there is a possibility that GOLD would consolidate for some time around the current levels.
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The British pound was seen trading lower against the US dollar Intraday, as the market failed one more time to break above the 1.7200 resistance level. However, the pair did manage to set a new yearly high this time, but the margin was of only few pips. The most important thing to note from the charts is that the GBPUSD pair has managed to close below the 100 simple moving average (SMA) on the 4 hour chart, which can be considered as a short-term bearish signal.
There is one more side of the coin, as the bullish trend line as highlighted in one of the previous analysis still remains intact for the pair. Currently, the GBPUSD pair is flirting around the same mentioned trend line. This trend line is also coinciding with the 38.2% fib retracement level of the last leg higher from the 1.6919 low to 1.7191 high. If the British pound sellers manage to break the trend line, then it might call for a move towards the 50% fib level, followed by the 61.8% fib level. Any further losses could take the pair towards the 200 SMA (4H) in that situation.
There is also a possibility that the pair might jump from the current level. In that situation, the pair might again challenge the 1.7180-90 resistance area. However, this particular scenario looks a bit difficult considering the current market sentiment.
The RSI on the 4 hour chart is also below the 50 level, which adds value to the bearish view. So, if the pair breaks lower, then the chance of a sharp move down is very likely in the short term.
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The Euro got slammed against the US dollar during this past week, as the market sentiment favoured the US dollar. The EURUSD broke the all-important 1.3500 support level to trade as low as 1.3491. However, this break was not sustainable, as the EURUSD pair jumped sharply to close the week above the 1.3510 level. This can be seen on the positive side, as such moves can sometimes be considered as a false break or a stop hunt.
There is a bearish trend line formed on the 4 hour chart for the EURUSD pair, which is acting as a resistance in the short term. However, the pair has breached the 23.6% fib retracement level of the last drop from the 1.3640 high to 1.3491 low. So, this has opened the door for a test of the 50% fib level in the short term. However, the EURUSD pair needs to break the trend line to confirm. If the pair manages to clear the trend line, then a test of the 38.2% fib level, which also coincides with the 100 hourly moving average is possible. More gains might take the pair towards the 50% fib level at 1.3565.
It is also possible that the pair might not be able to break the trend line. In that situation, immediate support can be seen around the 1.3512 level. A break below the mentioned support level might call for a retest of the last low of 1.3491.
The RSI on the 4 hour chart has breached the 50 level, which is a positive sign. However, as mentioned earlier the pair needs to break the trend line in order to confirm a short-term trend.
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The Swiss Franc is trading lower against most of its counterparts, including the US dollar. One of the main reasons for the same is the disappointing Swiss trade balance data, which was published by the Federal Statistical Office earlier during the London session. The market was expecting a reading of 2.970B, but the outcome missed the expectations and registered a reading of 1.377B. Moreover, the previous reading was revised up from 2.774B to 2.849B. So, the overall decline was on the higher side. The USDCHF pair spiked higher above the 0.9000 level moments ago.
There is an ascending channel forming on the hourly chart for the USDCHF pair. As of writing, the pair is testing the channel resistance trend line, which might act as a resistance in the short term. There is a chance that the pair might move a bit lower from the current levels and test the channel support trend line one more time. If that happens, then the US dollar buyers could reappear around the 0.8990 support level, and might push the pair higher again. The most important thing is that the pair has settled above the 76.4% fib level of the last drop from the 0.9036 high to 0.8855 low. This means that the chances of the pair testing the previous high of 0.9036 is quite high.
It is also possible that the pair might not fall from the current levels. In that situation, the pair might break the channel resistance zone and test the last high of 0.9036. It would be difficult for the US dollar buyers to push the pair above the mentioned level, as there are several high-risk events lined up later during the US session.
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The Euro was seen trading lower against most of its counterparts, including the New Zealand dollar. The Euro is one of the worst performers of the day, as it was trading below yesterday’s low compared to other currencies, which managed to recover some of the lost ground. The EURNZD pair has breached an important confluence support area, which means that the chances of more losses are quite high in the short term considering the current market sentiment.
There was a confluence of two trend lines around the 1.5500 support level, which was breached by the Euro sellers earlier. The EURNZD pair has even pierced the 61.8% fib retracement level of the last move higher from the 1.5411 low to 1.5627 high. So, it looks like the pair might continue trading lower in the coming sessions. However, there is a chance that the pair could retest the broken trend line support area, and if that happens, then the Euro sellers are likely to reappear. The 1.5500-10 area might act as a hurdle for the pair moving ahead. The hourly RSI is bouncing from the extreme level, which means the chances of this scenario is very high.
It is also possible that the pair might not retrace from the current levels. In that situation, initial support can be seen around the 76.4% fib level at 1.5460. Any further losses should take the pair towards the last swing low of 1.5410.
The RBNZ interest rate decision is one of the most important events lined up in the coming Asian session, which might affect the EURNZD pair to a great extent. So, keep a close eye on the mentioned event.
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The British pound traded lower against the Australian dollar earlier during this week. However, it looks like the pair is stabilizing now and might correct higher from the current levels. The UK Gross Domestic Product was released by the National Statistics earlier during the London session, which came in line with the expectation. The report published mentions that the UK GDP increased by 0.8% in Q2 2014, the second consecutive quarter on quarter increase of 0.8%. The British pound was seen trading a touch higher after the data release.
There was a major bullish trend line for the GBPAUD pair on the 4 hour chart, which was breached earlier during this week. The pair fell sharply after the break, and traded close to the 1.8010 support level. Currently, the pair is flirting with the 61.8% fib retracement level of the last major move higher from the 1.7822 low to 1.8373 high. It is very likely that the pair might bounce from the current levels, and trades closer to the broken trend line. If that happens, then sellers might appear around the 1.8140 level. The most important thing to note here is that the 200 moving average on the 4 hour chart also sits around the mentioned level.
Alternatively, if the pair fails to trade higher and close below the 61.8% fib level, then it might call for a test of the previous low. The RSI is bouncing from the extreme levels, and that is the reason why the chance of a short-term correction is more compared to a break lower.
Overall, as long as the pair is trading above the 1.8020 level, then it might correct and trade closer to the 200 moving average (4H).
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The Australian dollar is trading a touch higher against the New Zealand dollar. This has more to do with the New Zealand dollar weakness compared to the Australian dollar strength, as the AUDUSD has also declined recently. It looks like that the RBNZ intervention card played out well, as the New Zealand dollar has moved a lot lower against most of its counterparts, including the Australian dollar. The AUDNZD pair has climbed recently, and it looks like that the pair might continue surging higher if the New Zealand dollar keeps declining.
There is an uptrend channel forming on the 30 minute chart for the pair. As of writing, the pair is testing the channel resistance trend line which is also coinciding with the 76.4% fib retracement level of the last drop from the 1.1014 high to 1.0971 low. The RSI is also approaching the extreme levels, so the pair might dip a few pips from the current levels before it can continue trading higher. If the pair breaks higher, then a break of the previous high at 1.1014 is possible in the short term. A break above the same might expose the 1.1035 high moving ahead. The pair is trading above the 100 moving average on the 30 minute chart, which is a positive sign.
Alternatively, if the pair fails to trade higher and breaks the channel support trend line, then a test of the 100 moving average would be on the cards. Any further losses should find buyers around the 1.0968 low, which is a critical short-term support level and must hold if the pair has to continue trading higher.
Overall, buying dips look like a good option moving ahead.
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The Euro is trading higher against the New Zealand dollar in the last few days. However, EURNZD buyers need to be very careful moving ahead, as the pair is likely heading towards a monster resistance zone, which could act as a barrier for the Euro buyers and might result in a pullback. Moments ago, the Spanish retail sales data was published by the National Institute of Statistics. The forecast was slated for a 1.1% rise in June 2014. However, the outcome missed the expectation and registered a rise of only 0.2%. The reaction from the Euro traders was mostly muted, but the EURNZD pair might react sooner or later.
Technically, there is a trend line on the 4 hour chart for the EURNZD pair, which has held the upside in the pair on a few occasions. The most important point as of now is that the same trend line is meeting around the 50% fib retracement level of the last major drop from the 1.62009 high to 1.5412 low. So, the 1.5800 resistance area holds a lot of importance, and it is very likely that the Euro buyers might would find it hard to break the mentioned resistance zone. If they somehow manage to do so, then a run towards the 61.8% fib level is possible in the short term.
However, the chance of a failure around the trend line resistance area is more compared to a break higher. If the pair moves lower, then a test of the 200 moving average on the 4 hour chart is possible in the short term.
Overall, as long as the pair is trading below the trend line a short-term correction cannot be denied.
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The Canadian dollar has lost a lot of ground against the US dollar in the last few days. The USDCAD pair recently traded as high as 1.0868. However, we need to be very careful moving ahead, as the pair is approaching a major resistance area, which might result in a pullback in the pair. There are also major risk events lined up later during the day. So, we can say that the US dollar is at major risk of a correction against the Canadian dollar in the short term.
Technically, there is an ascending channel formed on the 4 hour chart for the USDCAD pair. The channel resistance currently lies around the 1.0880 level, which also coincides with the 76.4% fib retracement level of the last drop from the 1.0960 high to 1.0620 low. So, the 1.0880 holds a lot of importance for the pair, and if the pair trades closer to the mentioned level, then it might struggle to trade above it. In that situation, the pair might drop lower and test the channel support area, which is currently around the 1.0780 level. One more important thing to note here is that same level acted as a barrier earlier as well, so, it might act as a pivot zone moving ahead.
The RSI on the 4 hour chart is around the extreme levels, which increases the possibility of a correction in the short term.
So, we need to keep an eye on the channel resistance area around the risk events like the US GDP and the fed interest rate decision. The chance of a break above also cannot be denied considering the economic releases that are lined up.
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The British pound seems to be getting hammered after the release of the UK Nationwide Housing Price Index (HPI). The market was expecting a rise of 0.5% this time around. However, the outcome was softer than expected, as the UK HPI registered a reading of 0.1%. This is weighing on the British pound bulls, as the GBPUSD pair was seen trading lower and the EURGBP pair traded higher. The EURGBP pair approaching a critical resistance level, and if buyers manage to pierce the same, then more gains are likely in the pair.
Technically, there is a major bearish trend line connecting previous swing highs. The mentioned trend line is now coinciding with the 38.2% fib retracement level of the last down-move from the 0.8034 high to 0.7873 low. If the pair manages to clear the trend line and resistance level, settles above the same, then a run towards the 61.8% fib level is likely in the short term. It is even possible that the pair might trade back towards the previous high of 0.8034. However, we need the fundamentals in the Euro zone to align with the situation.
The RSI on the daily chart is getting closer to the 50 level, which is matching the trend line break area. So, if the daily RSI breaks up, then there are chances that the pair might follow as well. So, buying with a break looks like a good deal moving ahead.
Alternatively, if the pair fails to break the mentioned resistance level, then a move back towards the 0.7910-00 support area is possible, which might protect the downside in the pair.
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The British pound was hammered during this past week against most other major currencies. However, it was relatively firmer against the Canadian dollar as the latter one also weakened during this past week. Furthermore, the GBPCAD pair has breached an important support area, which might result in more losses in the pair in the short term. The technical indicators are pointing mixed outcome, which means one need to be very careful trading this pair moving ahead especially when the pair looming between important support and resistance levels.
There was a critical bullish trend line on the hourly chart for the GBPCAD pair, which was taken out by the British pound sellers earlier. After the break, the pair fell close to the 50% fib retracement level of the last leg higher from the 1.8214 low to 1.8458 high. The mentioned fib level also coincided with the 200 hourly moving average. So, this particular bounce came from a very technical level. However, on the other hand the pair is approaching a critical resistance area of the broken trend line, which as of writing is coinciding with the 100 moving average. A failure to break the 1.8340-45 level might call for a down-move back towards the 200 moving average. It would be interesting to see whether the pair can hold the same this time around or not.
So, overall the pair is trading in between an important support and resistance level, as a break of either one might call for a sharp move in the short term.
The UK construction PMI data is lined up for release in an hour, which might cause swing moves in the pair.
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The British pound trading lower intraday against the US dollar, as the market sentiment still weighs on the GBPUSD pair. The recent economic data showed weakness in the UK’s production sector, which resulted in a down-move in the British pound. However, the pair is heading towards an important support level, which might act as a barrier for sellers in the short term. There is a major risk event lined up later today I.e. the Bank of England will announce the interest rates. There are no changes expected by the forex market, and it would be interesting to see how the GBPUSD pair reacts post event.
There is an important bullish trend line formed on the hourly chart for the pair, which could possibly act as a support for the pair. The negative point to note is that the pair is trading below the 100 hourly moving average. Moreover, the hourly RSI is also below the 50 mark, which might increase the bearish pressure in the short term. So, the pair must hold the highlighted trend line, as a break below could ignite a sharp move lower in the pair maybe towards the 1.6750 level where buyers might reappear again.
On the upside, if the pair bounces from the current or a bit lower levels, then initial resistance can be seen around the 100 hourly moving average. If the pair manages to close above the mentioned moving average, then it would put the pair back in the bullish zone.
Overall, dips can be considered as an opportunity for buying with a tight stop below the last low of 1.6810.
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GOLD traded higher during this past week, as the safe havens were seen bid. The yellow metal traded close to the $1322 level. It looks like that it is under correction as of writing, but can be considered as a buying opportunity. GOLD buyers managed to break an important resistance area during this past week, which means more gains are likely in the coming days. There is no major risk event lined up later today, so it is likely to consolidate in a range in the upcoming session.
There was a critical bearish trend line formed on the 4 hour chart for GOLD, which acted as a resistance on several occasions. The mentioned trend line was breached earlier during this past week. The most important point is that GOLD buyers manages to pierce the 100 moving average as well. GOLD is currently trading around the 200 moving average, and if it falls lower, then the broken trend line might act as a support. Moreover, the 100 moving average is also around the same area, so sellers are likely to struggle around the $1300 level. Only a break and close below the 100 moving average could ignite more losses in the yellow metal.
On the upside, the 200 moving average might act as a resistance, and if it paves way then a run towards the last high is possible. Any further gains might take the prices close to the $1340 level.
Overall, dips might provide a nice buying opportunity, but we need to keep a close eye on the 100 moving average, as a break might turn the bias to bearish.
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The Euro traded lower against the US dollar and the British pound today, but it somehow managed to retain ground against the Japanese yen. However, it was less to do with the Euro strength and more to do with the yen’s weakness across the board. The EURJPY pair broke an important resistance area, which has increased the probability of more upside in the short term. The German CPI data was also published earlier during the London session, which came in line with the expectation. This could possibly support the Euro in the short term.
There was an important bearish trend line formed on the hourly chart for the EURJPY pair, which acted as a resistance several times. The pair recently broke the mentioned trend line, but found sellers around the 50% fib retracement level of the last drop from the 138 high to 135.72 low. So, it is likely that the pair might correct a bit lower from the current levels, but it could find the broken trend line on the downside, which might act as a support for the pair. Moreover, the pair is trading above the 100 hourly moving average, which is also a positive sign.
So, if the pair bounces from the current or a bit lower levels, then initial resistance can be seen around the 200 hourly moving average, which is just below the 61.8% fib level. A break and close above the 61.8% fib level might call for a move back towards the last high of 138.00.
Overall, buying dips remain a good option in the short term unless the pair breaks below the 100 hourly moving average.
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The British pound collapsed against most major currencies during this past week, including the Australian dollar. The GBPAUD pair fell sharply and traded as low as 1.7876 where buyers emerged to hold the downside. The fundamentals were mostly in favour of the Australian dollar in the short term, but this might change at any time. Earlier during the Asian session, the Australia’s New Motor Vehicle Sales data was published by the Australian Bureau of Statistics. The outcome was a disappointing one, as the Australia’s New Motor Vehicle Sales fell by 1.3%, compared to the gain of 2.2% last time.
There is an important bearish trend line formed on the hourly chart for the GBPAUD pair. The pair is currently trading around the mentioned trend line and struggling to break it. The most important thing to note here is that the 100 moving average and 38.2% fib retracement level of the last drop from the 1.8140 high to 1.7876 low just sit above the bearish trend line. So, the 1.7975-80 levels are very critical for the pair, as a break above the same might ignite sharp gains in the pair. In that situation, the pair could climb towards the 200 moving average, which also coincides with the 61.8% fib level.
Alternatively, if the pair fails to break above the resistance area, then it might fall back towards the last low of 1.7876. It would be tough for the Aussie buyers to take the GBPAUD pair below the last low, but if sellers fail to defend then a move towards the 1.7820 level might be possible.
Overall, buying with a break or selling with a tight stop can be considered in the short term.
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GOLD recently struggled to break the $1320 level and traded lower towards the $1295 support area. It looks like it is consolidating as of writing, and waiting for a catalyst for the next move. There are a couple of important economic releases lined up later during the New York session, including the US consumer price index data, building permits figure and housing starts data. The US CPI outcome might have a huge impact on GOLD prices. The market is expecting the US CPI be to around 2%, compared to the last reading of 2.1%.
There is an important bullish trend line formed on the 4 hour chart for GOLD. The recent fall in GOLD stalled right around the mentioned trend line. However, recovery after that is not convincing, which means there is still a risk of breakdown in the short term. If GOLD sellers manage to break the trend line and support area, then it is possible that the prices might fall towards the last swing low of $1280. Any further losses might take GOLD towards the $1260 support area. The 4H RSI is below the 50 mark, which adds value to the bearish view moving ahead.
Alternatively, if GOLD buyers manage to take the prices a bit higher from the current levels then they might face resistance around the 100 moving average, followed by the 200 moving average. There are several resistances on the way up for GOLD, which means selling pressure remains intact in the near term.
Overall, selling rallies remain a good option considering the upcoming risk event. $1320 is a major hurdle for GOLD on the upside.
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The US dollar blasted higher against most major currencies, including the Swiss franc yesterday post the FOMC meeting minutes. The US dollar bulls were impressed by the outcome, as they took the USDCHF pair to fresh monthly highs. The pair also managed to break important resistance area, which might act as a support moving ahead. There are a couple of important economic releases lined up in the US today, including the initial jobless claims and the existing homes sales data. So, there can be swing moves in the pair in the coming session.
There is an important up-move trend line formed on the hourly chart for the pair, which is likely to hold the downside in the pair. Currently, the pair heading towards the mentioned trend line. A key point to note here is that the same trend line is now coinciding with the 38.2% fib retracement level of the last up-move from the 0.9055 low to 0.9145 high. So, if the pair moves lower from the current levels, then the US dollar buyers might appear around the 0.9110 level. Only a break and close below the 50% fib level would negate the bullish view on the pair, which could take the pair towards the last swing low of 0.9055 level.
On the upside, initial resistance can be seen around the recent high of 0.9145. A break above the mentioned level might expose a test of the 0.9200 resistance area in the short term.
Overall, buying dips is a good option until the pair is trading above the 0.9100 level, as a break could increase the chance of a larger correction.
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The Canadian dollar is trading higher against the Japanese yen. The key reason for the rise in the CADJPY pair is weakness in the Japanese yen across the board. This has encouraged the Canadian dollar buyers to take it higher. There are several important risk events lined up later during the NY session, which can affect the CADJPY to a greater extent. The first one to keep an eye on is the Canadian inflation data, which will be released by the statistics Canada. One more important economic data which will be released is the Canadian retail sales data. If the outcome of the mentioned events comes in line with the expectations, the there is a high probability of the CADJPY pair trading higher.
There is a critical bullish trend line formed on the 4 hour chart for the EURUSD pair, which is currently acting as a support for the pair. One key point to note here is that the pair is trading above the 200 and 100 moving average, which can be considered as a positive sign. If the pair dips from the current or a bit higher levels, then there is a chance that the pair might find buyers around the mentioned bullish trend line. The same trend line is also coinciding with the 23.6% fib retracement level of the last leg higher from the 92.75 low to 94.95 high. Only a break below the trend line might increase the bearish pressure on the pair.
On the upside, initial resistance can be seen around the last high of 95.20, followed by the all-important resistance area at 96.00.
Overall, buying dips is a good option until the pair is trading above the highlighted trend line.
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The Euro traded a touch higher against the Japanese yen during this past week, but traded lower before going into the weekend. Moreover, it opened with a gap lower against the US dollar, but managed to survive against the yen. However, the pair broke an important support level, and that is a reason why the EURJPY pair might spike lower from the current levels. However, there are several support levels on the way down, which could act as a barrier for the Euro sellers in the short term.
There was a major bullish trend line on the hourly chart for the EURJPY pair, which was broken recently. The pair is currently trading around the 100 hourly simple moving average, which can be taken out easily considering the current market sentiment. However, there is an important support area around the 137.20 level. The 200 hourly moving average is sitting around the mentioned support level. Moreover, the 50% fib retracement level of the last leg higher from the 136.36 low to 137.99 high. So, there is a chance that the Euro buyers might appear around the 137.20-10 area. If it fails to hold, then it might drop all the way towards the 136.75 level.
On the upside, initial resistance can be seen around the 137.60 level, followed by the recent high of 137.99 level. There is an important economic release scheduled during the London session i.e. the German IFO business climate index will be released, which might impact the Euro in the short term.
Overall, buying dips remain a good option until the pair is trading above the highlighted support area around the 137.20 level.
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