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Despite failing to sustain a break above 1.4855 on Friday morning, GBPUSD was given a boost by the unexpected China announcement over the weekend, and has since punched straight through the next significant resistance levels (50-day moving average 1.4861 and 13 May 1.4918) to touch highs of 1.4937. We feel that the former 1.4855 resistance should now act as a first support, andechoing the picture in EURUSD today, there are also likely to be bids around a 2-week uptrend support at 1.4810.
One factor which may prove significant later on is that this morning’s rally has failed to hold above that 13 May high for long and has even carved out an evening star candlestick on the hourly chart. As such, we remain wary of sellers jumping on the bandwagon to force a break of the 2-week uptrend, and note supports below at Friday’s lows 1.4772 and the 17 Jun low of 1.4645.
Should our fears be unfounded and the 2-week uptrend continue, expect resistance at the psychologically important 1.5000 level then the 100-day moving average 1.5082.
Despite failing to sustain a break above 1.4855 on Friday morning, GBPUSD was given a boost by the unexpected China announcement over the weekend, and has since punched straight through the next significant resistance levels (50-day moving average 1.4861 and 13 May 1.4918) to touch highs of 1.4937. We feel that the former 1.4855 resistance should now act as a first support, andechoing the picture in EURUSD today, there are also likely to be bids around a 2-week uptrend support at 1.4810.
One factor which may prove significant later on is that this morning’s rally has failed to hold above that 13 May high for long and has even carved out an evening star candlestick on the hourly chart. As such, we remain wary of sellers jumping on the bandwagon to force a break of the 2-week uptrend, and note supports below at Friday’s lows 1.4772 and the 17 Jun low of 1.4645.
Should our fears be unfounded and the 2-week uptrend continue, expect resistance at the psychologically important 1.5000 level then the 100-day moving average 1.5082.
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The descending triangle pattern on the hourly chart has played out very nicely over the weekend, and after a quick spike down on the open we have been within a stone’s throw of our target at 90.10.
Since that frenzy at the open, the relief rally has been pretty impressive (90.96 high), but thus far the bulls have not been able to break back above the ceiling of supply around 91.00. Whilst 91.00 remains intact, we feel the downside is vulnerable to another dip lower; major support at 89.80 is the one to watch below.
Should we instead rally higher, 91.35 is the upper edge of our descending triangle, then the 100-day moving average 91.57, followed by last Wednesday’s highs at 91.82.
The descending triangle pattern on the hourly chart has played out very nicely over the weekend, and after a quick spike down on the open we have been within a stone’s throw of our target at 90.10.
Since that frenzy at the open, the relief rally has been pretty impressive (90.96 high), but thus far the bulls have not been able to break back above the ceiling of supply around 91.00. Whilst 91.00 remains intact, we feel the downside is vulnerable to another dip lower; major support at 89.80 is the one to watch below.
Should we instead rally higher, 91.35 is the upper edge of our descending triangle, then the 100-day moving average 91.57, followed by last Wednesday’s highs at 91.82.
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Welcome back everyone; albeit to a remarkably slow morning considering the weekend news on China’s yuan policy. FX markets commenced with EURUSD gapping higher on the open to touch 1.2487 (from a close on Friday about 100 pips lower), but the pair has since pared back towards the 28 May high 1.2452; and with an empty economic release calendar ahead, we may be in for a sluggish day.
At the present time, the 2-week uptrend channel remains fully operational with trendline support expected at 1.2380 and the former resistance-turned-support at 1.2350-55 also likely to harbour good buyers below. Arguably, the risk-reward profile should favour further upside, with very few resistance levels above 1.2452; the upper edge of the current uptrend is a long way off at 1.2575, and the 50-day moving average still playing catch-up at 1.2680.
We do however take heed of the bearish harami cross on the daily chart at the end of last week which suggests an imminent reversal is due, so for now we only look to play ranges for 30-40 pip moves between the uptrend support and 1.2452 resistance, and wait for further developments before engaging in a more directional medium-term view.
Welcome back everyone; albeit to a remarkably slow morning considering the weekend news on China’s yuan policy. FX markets commenced with EURUSD gapping higher on the open to touch 1.2487 (from a close on Friday about 100 pips lower), but the pair has since pared back towards the 28 May high 1.2452; and with an empty economic release calendar ahead, we may be in for a sluggish day.
At the present time, the 2-week uptrend channel remains fully operational with trendline support expected at 1.2380 and the former resistance-turned-support at 1.2350-55 also likely to harbour good buyers below. Arguably, the risk-reward profile should favour further upside, with very few resistance levels above 1.2452; the upper edge of the current uptrend is a long way off at 1.2575, and the 50-day moving average still playing catch-up at 1.2680.
We do however take heed of the bearish harami cross on the daily chart at the end of last week which suggests an imminent reversal is due, so for now we only look to play ranges for 30-40 pip moves between the uptrend support and 1.2452 resistance, and wait for further developments before engaging in a more directional medium-term view.
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Any buyers for some USDCHF? *echoing silence*
Plunge yesterday has tickled the 1.1095 lows a couple of times in the past session, but the rebounds have been weaker and shorter-lived on every attempt. As such there is a very short-term descending triangle pattern developing (though not confirmed) on the hourly chart, so look for a break below 1.1095 to lead to a quick dip to 1.1035 levels (coincidentally this target is identical to the 11 May lows).
Should the move extend further, next major support is expected at 1.0924 which represents not only the 10 May lows but also the 100-day moving average –and as such should be respected as a likely platform for a rebound on the first visit.
Rallies will struggle through the 50-day moving average at 1.1160, and also former trendline supports back up at 1.1195 and 1.1250 (the latter being our ideal area to re-load shorts).
Any buyers for some USDCHF? *echoing silence*
Plunge yesterday has tickled the 1.1095 lows a couple of times in the past session, but the rebounds have been weaker and shorter-lived on every attempt. As such there is a very short-term descending triangle pattern developing (though not confirmed) on the hourly chart, so look for a break below 1.1095 to lead to a quick dip to 1.1035 levels (coincidentally this target is identical to the 11 May lows).
Should the move extend further, next major support is expected at 1.0924 which represents not only the 10 May lows but also the 100-day moving average –and as such should be respected as a likely platform for a rebound on the first visit.
Rallies will struggle through the 50-day moving average at 1.1160, and also former trendline supports back up at 1.1195 and 1.1250 (the latter being our ideal area to re-load shorts).
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GBPUSD
Like EURUSD, GBPUSD doubters we quickly whipsawed yesterday from the false break of uptrend support, and have since been taken on a searing ride higher which has carved out a bullish engulfing candlestick on the daily chart.
At the time of writing, 1.4855 resistance looks under threat, and really beyond there are very few areas of anticipated selling interest. The 50-day moving average comes in at 1.4873, with the 13 May high just beyond at 1.4918 –but once cleared, there is fresh air until the 10 May highs of 1.5055.
Support can be expected at the lower edge of this uptrend channel at 1.4755, then yesterday reaction low of 1.4645. As mentioned earlier in the week, the more distant downside supports are still valid at 1.4505 (which held the pair on 10 Jun and 11 Jun), then 1.4346 (8 Jun low).
Like EURUSD, GBPUSD doubters we quickly whipsawed yesterday from the false break of uptrend support, and have since been taken on a searing ride higher which has carved out a bullish engulfing candlestick on the daily chart.
At the time of writing, 1.4855 resistance looks under threat, and really beyond there are very few areas of anticipated selling interest. The 50-day moving average comes in at 1.4873, with the 13 May high just beyond at 1.4918 –but once cleared, there is fresh air until the 10 May highs of 1.5055.
Support can be expected at the lower edge of this uptrend channel at 1.4755, then yesterday reaction low of 1.4645. As mentioned earlier in the week, the more distant downside supports are still valid at 1.4505 (which held the pair on 10 Jun and 11 Jun), then 1.4346 (8 Jun low).
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USDJPY
The downward pressure on USDJPY has continued in the past 24 hours; and indeed the break below 91.10 support was key signal for us that a descending triangle pattern on the hourly chart has been activated. For those who missed the hourly close on the first plunge (blame the Argentina-South Korea game for that oversight here) there has been a second bite at the cherry overnight on the re-test (phew!), so we now set our sights on the target below of 90.10.
The prior 8 & 10 Jun low of 90.85 appears to have lost its mojo as a relevant technical level, so the only support between here and our target lies at 90.50-55 (coinciding with yesterday’s low and that of the 1 Jun). Big support at 89.80 is still intact below and given our medium-term bullish bias we certainly aren’t going to be holding shorts any longer than we have to.
Expect sellers to step in again around 91.00 on any subsequent rallies, 91.50 is the upper edge of our descending triangle (with 100-day moving average 91.57), then Wednesday’s highs at 91.82.
The downward pressure on USDJPY has continued in the past 24 hours; and indeed the break below 91.10 support was key signal for us that a descending triangle pattern on the hourly chart has been activated. For those who missed the hourly close on the first plunge (blame the Argentina-South Korea game for that oversight here) there has been a second bite at the cherry overnight on the re-test (phew!), so we now set our sights on the target below of 90.10.
The prior 8 & 10 Jun low of 90.85 appears to have lost its mojo as a relevant technical level, so the only support between here and our target lies at 90.50-55 (coinciding with yesterday’s low and that of the 1 Jun). Big support at 89.80 is still intact below and given our medium-term bullish bias we certainly aren’t going to be holding shorts any longer than we have to.
Expect sellers to step in again around 91.00 on any subsequent rallies, 91.50 is the upper edge of our descending triangle (with 100-day moving average 91.57), then Wednesday’s highs at 91.82.
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EURUSD
What a head-fake from EURUSD yesterday! Having started the morning with a tumble through its 2-week uptrend which triggered a few stops down to 1.2242; the pair came ripping back higher and has since pushed to a new weekly high. Mercifully, we did not see an hourly close below that uptrend line at 1.2265 which would have induced us to go short down there, but it’s definitely one of those times where we’re kicking ourselves for getting out of previous longs prematurely. For those who had the steely composure to hold on to their positions from the bullish cup and handle break-out, their bravery has been rewarded by achieving the 1.2415 target yesterday afternoon. For the sticklers, the high was in fact 1.2413; but what’s a couple of pips between friends after a great run all the way from 1.2145?
Going forward, we are now trading slap in the middle of the 2-week uptrend channel once more so expect bidders to be the more active force; supports on the downside seen at 1.2355 former resistance and then trendline support at 1.2325.
On the topside, 1.2450 (last seen 28 May) is the first area of resistance, with the upper edge of the 2-week uptrend at 1.2515, and the 50-day moving average coming in at a distant 1.2704.
What a head-fake from EURUSD yesterday! Having started the morning with a tumble through its 2-week uptrend which triggered a few stops down to 1.2242; the pair came ripping back higher and has since pushed to a new weekly high. Mercifully, we did not see an hourly close below that uptrend line at 1.2265 which would have induced us to go short down there, but it’s definitely one of those times where we’re kicking ourselves for getting out of previous longs prematurely. For those who had the steely composure to hold on to their positions from the bullish cup and handle break-out, their bravery has been rewarded by achieving the 1.2415 target yesterday afternoon. For the sticklers, the high was in fact 1.2413; but what’s a couple of pips between friends after a great run all the way from 1.2145?
Going forward, we are now trading slap in the middle of the 2-week uptrend channel once more so expect bidders to be the more active force; supports on the downside seen at 1.2355 former resistance and then trendline support at 1.2325.
On the topside, 1.2450 (last seen 28 May) is the first area of resistance, with the upper edge of the 2-week uptrend at 1.2515, and the 50-day moving average coming in at a distant 1.2704.
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The dazzling strength of the Swiss franc in the past 24 hours is most likely a direct consequence of the stunning World Cup win for Switzerland over favourites Spain in yesterday’s Group H opener –nice work boys! Really, EURCHF did not stand a chance.
In USDCHF, we have now collapsed through all trendline supports, and indeed the previous lows at 1.1250, so the picture is extremely bearish from here; with only the50-day moving average at 1.1152 standing in the way of another plunge to the 10 May lows at 1.0924.
Given the rapid speed of the sell-off it’s been tough to get in on the short trade on the first move, so we would be keen sellers on any rallies back up towards 1.1250. Any rallies which do exceed that area will likely get clobbered back down if they get anywhere close to 1.1350.
The dazzling strength of the Swiss franc in the past 24 hours is most likely a direct consequence of the stunning World Cup win for Switzerland over favourites Spain in yesterday’s Group H opener –nice work boys! Really, EURCHF did not stand a chance.
In USDCHF, we have now collapsed through all trendline supports, and indeed the previous lows at 1.1250, so the picture is extremely bearish from here; with only the50-day moving average at 1.1152 standing in the way of another plunge to the 10 May lows at 1.0924.
Given the rapid speed of the sell-off it’s been tough to get in on the short trade on the first move, so we would be keen sellers on any rallies back up towards 1.1250. Any rallies which do exceed that area will likely get clobbered back down if they get anywhere close to 1.1350.
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Risk appetite is definitely looking vulnerable this morning after a subdued performance from Asian equity markets overnight; consequently GBPUSD’s correction lower has breached its 2-week uptrend at 1.4695 and the 1.4683 support (Tuesday’s low), going on to touch a low of 1.4646.
As I type, the bulls are bidding the pair back higher, but we would be wary of jumping back on board long trades until the pair proves it can hold above 1.4720 (today’s European session highs).
Next resistance levels expected at 1.4750 (Wednesday’s lows), the 50-day moving average at 1.4880, then yesterday’s high 1.4856. Supports below anticipated at today’s low 1.4646, 1.4505 (which held the pair on 10 Jun and 11 Jun), then 1.4346 (8 Jun low).
Risk appetite is definitely looking vulnerable this morning after a subdued performance from Asian equity markets overnight; consequently GBPUSD’s correction lower has breached its 2-week uptrend at 1.4695 and the 1.4683 support (Tuesday’s low), going on to touch a low of 1.4646.
As I type, the bulls are bidding the pair back higher, but we would be wary of jumping back on board long trades until the pair proves it can hold above 1.4720 (today’s European session highs).
Next resistance levels expected at 1.4750 (Wednesday’s lows), the 50-day moving average at 1.4880, then yesterday’s high 1.4856. Supports below anticipated at today’s low 1.4646, 1.4505 (which held the pair on 10 Jun and 11 Jun), then 1.4346 (8 Jun low).
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Another predictable slump in USDJPY yesterday back towards the range lows has helped us milk a little more out of this range (90.85 –92.10), but the overnight rebound has been far from compelling, and we now see a possible descending triangle pattern being carved out on the hourly chart which has persuaded us not to try playing for another move up towards 92.00 just yet.
The lower edge of that triangle incorporates the lows seen on Tuesday and Wednesday of this week at 91.10, so if we get an hourly close through that level we would look for opportunities to sell, targeting 90.10. As you may recall, our medium term bias in USDJPY is for the pair to move higher (so less conviction in short trades); therefore, rather than just sell on the break-out, we would be more comfortable waiting for any break-out to come back for a re-test of 91.10 before engaging in the short trade.
Supports on the downside are eyed at the 8 Jun and 10 Jun lows 90.85 (backed by 200-day moving average at 90.90), with the old levels at 90.50 and 89.80 still intact. On the topside, first resistance will be the sloped edge of the triangle at 91.65, yesterday’s highs 91.82, range highs 92.10, and 50-day moving averageat 92.28.
Another predictable slump in USDJPY yesterday back towards the range lows has helped us milk a little more out of this range (90.85 –92.10), but the overnight rebound has been far from compelling, and we now see a possible descending triangle pattern being carved out on the hourly chart which has persuaded us not to try playing for another move up towards 92.00 just yet.
The lower edge of that triangle incorporates the lows seen on Tuesday and Wednesday of this week at 91.10, so if we get an hourly close through that level we would look for opportunities to sell, targeting 90.10. As you may recall, our medium term bias in USDJPY is for the pair to move higher (so less conviction in short trades); therefore, rather than just sell on the break-out, we would be more comfortable waiting for any break-out to come back for a re-test of 91.10 before engaging in the short trade.
Supports on the downside are eyed at the 8 Jun and 10 Jun lows 90.85 (backed by 200-day moving average at 90.90), with the old levels at 90.50 and 89.80 still intact. On the topside, first resistance will be the sloped edge of the triangle at 91.65, yesterday’s highs 91.82, range highs 92.10, and 50-day moving averageat 92.28.
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