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After twice failing to overthrow resistance at 1.2355, EURUSD has pared back some of its recent gains and now looks to be threatening a break of its 2-week uptrend channel. Whilst the bullish cup and handle pattern we have been tracking on the hourly is still theoretically in play, we got out of longs when our trailing stop was hit at 1.2280 (see yesterday’s report) and now feel prepared to play this pair short if we get an hourly close below the uptrend channel.
That trendline support is now seen at 1.2265, with yesterday’s lows 1.2255 also just below there; ideally we would like to see the hourly bar close through both of these levels before we enter a short trade, setting a stop above today’s European session highs 1.2284, and setting a target around 1.2200.
Next resistance below there lies around 1.2165-70 (14-15 Jun support), then the rim of our cup and handle pattern at 1.2145. Resistance now eyed at 1.2355, and 1.2450 (last seen 28 May).
After twice failing to overthrow resistance at 1.2355, EURUSD has pared back some of its recent gains and now looks to be threatening a break of its 2-week uptrend channel. Whilst the bullish cup and handle pattern we have been tracking on the hourly is still theoretically in play, we got out of longs when our trailing stop was hit at 1.2280 (see yesterday’s report) and now feel prepared to play this pair short if we get an hourly close below the uptrend channel.
That trendline support is now seen at 1.2265, with yesterday’s lows 1.2255 also just below there; ideally we would like to see the hourly bar close through both of these levels before we enter a short trade, setting a stop above today’s European session highs 1.2284, and setting a target around 1.2200.
Next resistance below there lies around 1.2165-70 (14-15 Jun support), then the rim of our cup and handle pattern at 1.2145. Resistance now eyed at 1.2355, and 1.2450 (last seen 28 May).
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Bullish resolve has been rewarded in the past 24 hours as yesterday’s early dip back to 1.2170 levels quickly reversed; pushingabove Monday’s 1.2299 high, and this morning hitting a fresh peak of 1.2353 (identical to the 1 Jun high). For the time being the progress through the 3 Jun 1.2327 resistance has been extremely sticky, and markets may need to see another strong day from equity indices before taking another leg higher.
The bullish cup and handle pattern on the hourly chart is now tantalizingly close to completion, with the target above set at 1.2415 (having started all the way back at 1.2145). We just missed out on adding to longs yesterday on the dip, but still hold our original break-out position until 1.2400 levels, and now trail our stop to 1.2280 (giving ourselves some cushion below the 14 Jun highs of 1.2299). For those with higher conviction/deeper pockets than us who wish to stay long, next support below there is due at 1.2210 (where the lower edge of our adjusted 1-2 week uptrend channel lies).
Be aware of important resistance around 1.2450 (last seen 28 May) which will provide a decent area of resistance on the first visit.
Bullish resolve has been rewarded in the past 24 hours as yesterday’s early dip back to 1.2170 levels quickly reversed; pushingabove Monday’s 1.2299 high, and this morning hitting a fresh peak of 1.2353 (identical to the 1 Jun high). For the time being the progress through the 3 Jun 1.2327 resistance has been extremely sticky, and markets may need to see another strong day from equity indices before taking another leg higher.
The bullish cup and handle pattern on the hourly chart is now tantalizingly close to completion, with the target above set at 1.2415 (having started all the way back at 1.2145). We just missed out on adding to longs yesterday on the dip, but still hold our original break-out position until 1.2400 levels, and now trail our stop to 1.2280 (giving ourselves some cushion below the 14 Jun highs of 1.2299). For those with higher conviction/deeper pockets than us who wish to stay long, next support below there is due at 1.2210 (where the lower edge of our adjusted 1-2 week uptrend channel lies).
Be aware of important resistance around 1.2450 (last seen 28 May) which will provide a decent area of resistance on the first visit.
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The range-trading strategy between 90.85 –92.10 is working out very well for us at the moment with plenty of opportunity to pick up some cheap USDJPY around 91.10 yesterday morning and satisfying gains made overnight.
We currently find ourselves back up towards the upper end of the range (91.80) so have taken yesterday’s longs off the table here and flipped round to a short position –anticipating that resistance will start kicking in at 92.10 range highs, backed up by further protection at 92.33 (50-day moving average).
Our target is a little more conservative on this oscillation at 91.20 –a little way above the range floor and 8 Jun and 10 Jun lows 90.85 (also note the 200-day moving average at 90.91). There is further support anticipated at 90.50, but below that level a rather unwelcoming drop until 89.80.
The range-trading strategy between 90.85 –92.10 is working out very well for us at the moment with plenty of opportunity to pick up some cheap USDJPY around 91.10 yesterday morning and satisfying gains made overnight.
We currently find ourselves back up towards the upper end of the range (91.80) so have taken yesterday’s longs off the table here and flipped round to a short position –anticipating that resistance will start kicking in at 92.10 range highs, backed up by further protection at 92.33 (50-day moving average).
Our target is a little more conservative on this oscillation at 91.20 –a little way above the range floor and 8 Jun and 10 Jun lows 90.85 (also note the 200-day moving average at 90.91). There is further support anticipated at 90.50, but below that level a rather unwelcoming drop until 89.80.
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Despite yesterday’s CPI release being a bit of a damp squib, GBPUSD has still looked very supported during the recent equity rally.
Our bias is still bullish as long as the 1-week uptrend remains intact (lower edge of said channel seen at 1.4650), and in additon, there is a possible bullish flag pattern apparent on the hourly chart. Measuring the flagpole from the 11 Jun lows 1.4505, we would infer a target for this pattern at around 1.5100 –however there are a number of resistance levels expected before that; starting with the 50-day moving average at 1.4890, the 13 May high 1.4918 and the 15 April high at 1.5524.
Supports below anticipated 1.4680, 1.4650, then around 1.4505 (which held the pair on 10 Jun and 11 Jun).
Despite yesterday’s CPI release being a bit of a damp squib, GBPUSD has still looked very supported during the recent equity rally.
Our bias is still bullish as long as the 1-week uptrend remains intact (lower edge of said channel seen at 1.4650), and in additon, there is a possible bullish flag pattern apparent on the hourly chart. Measuring the flagpole from the 11 Jun lows 1.4505, we would infer a target for this pattern at around 1.5100 –however there are a number of resistance levels expected before that; starting with the 50-day moving average at 1.4890, the 13 May high 1.4918 and the 15 April high at 1.5524.
Supports below anticipated 1.4680, 1.4650, then around 1.4505 (which held the pair on 10 Jun and 11 Jun).
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Contrary to our call yesterday that USDCHF was likely to remain range-bound between 1.1350 –1.1550, it seems the bears have taken control and pushed us ruthlessly lower to 1.1278. We can now draw a fresh 1-week downtrend channel on the hourly chart that suggests trendline support is due around 1.1270; a level that also coincides with the lows on 18 May. Given the confluence of these two supports (with further buying interest expected around 1.1250), there is a high likelihood of a rebound in the very short-term; but rather than attempt a long in this bearish backdrop, we instead wait for a re-test of 1.1350 former support to go short (leaving a sell order just ahead of there at 1.1330).
Should the resistance at 1.1350 fail, watch for sellers to step in around 1.1400, 1.1470, then again at the 1.1550 (last Friday’s highs).
On a resumption of the selling pressure, supports are eyed at 1.1270 and 1.1250 (as previously mentioned) and the 50-day moving average at 1.1144.
Contrary to our call yesterday that USDCHF was likely to remain range-bound between 1.1350 –1.1550, it seems the bears have taken control and pushed us ruthlessly lower to 1.1278. We can now draw a fresh 1-week downtrend channel on the hourly chart that suggests trendline support is due around 1.1270; a level that also coincides with the lows on 18 May. Given the confluence of these two supports (with further buying interest expected around 1.1250), there is a high likelihood of a rebound in the very short-term; but rather than attempt a long in this bearish backdrop, we instead wait for a re-test of 1.1350 former support to go short (leaving a sell order just ahead of there at 1.1330).
Should the resistance at 1.1350 fail, watch for sellers to step in around 1.1400, 1.1470, then again at the 1.1550 (last Friday’s highs).
On a resumption of the selling pressure, supports are eyed at 1.1270 and 1.1250 (as previously mentioned) and the 50-day moving average at 1.1144.
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Monday risk-on; so Tuesday risk-off? EURUSD staged an impressive 200-pip rally yesterday as strong equity market gains (and a lack of better excuses to do otherwise) helped squeeze out weak shorts, touching a high of 1.2299. Significantly though, the bulls stopped short of tackling 1.2330 resistance (3 Jun highs), and fresh Greek downgrades have since pared the gains all the way back below 1.2200 levels. For now however, we still see this as a dip to buy rather than the start of a range-trading environment.
The bullish cup and handle pattern on the hourly chart (discussed yesterday) is still valid, with the break-out level of 1.2145 remaining thus far untouched below. We would therefore buy smalls around 1.2150-60 levels, and given the depth of the cup is around 270 pips and the brim of the cup lies around that 1.2145, we expect a target in the region of 1.2415.
Supports eyed on the downside come in at 1.2105 (lower edge of the 1-week uptrend), 1.2080 (last Wednesday’s high) and then the psychologically important 1.2000.
Monday risk-on; so Tuesday risk-off? EURUSD staged an impressive 200-pip rally yesterday as strong equity market gains (and a lack of better excuses to do otherwise) helped squeeze out weak shorts, touching a high of 1.2299. Significantly though, the bulls stopped short of tackling 1.2330 resistance (3 Jun highs), and fresh Greek downgrades have since pared the gains all the way back below 1.2200 levels. For now however, we still see this as a dip to buy rather than the start of a range-trading environment.
The bullish cup and handle pattern on the hourly chart (discussed yesterday) is still valid, with the break-out level of 1.2145 remaining thus far untouched below. We would therefore buy smalls around 1.2150-60 levels, and given the depth of the cup is around 270 pips and the brim of the cup lies around that 1.2145, we expect a target in the region of 1.2415.
Supports eyed on the downside come in at 1.2105 (lower edge of the 1-week uptrend), 1.2080 (last Wednesday’s high) and then the psychologically important 1.2000.
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Just as we predicted yesterday, USDJPY looks to be in the grip of a range-trading mentality between 90.85 –92.10. The bullish momentum yesterday morning failed to pierce either the former uptrend channel or indeed the proposed range ceiling of 92.10, and we have since collapsed quickly back down towards the lower end of the range.
At these lower levels we are buyers (eyeing 91.00-10 as a tasty entry level), with a stop through the 8 Jun and 10 Jun lows of 90.85 (also coinciding with the 200-day moving average at 90.91). There is further support anticipated at 90.50, but if the bears have enough gumption to get us below there then don’t expect much safety net again until 89.80 levels.
Resistance obviously remains around 92.00-10, backed up by further technical resistance at 92.36 (50-day moving average).
Just as we predicted yesterday, USDJPY looks to be in the grip of a range-trading mentality between 90.85 –92.10. The bullish momentum yesterday morning failed to pierce either the former uptrend channel or indeed the proposed range ceiling of 92.10, and we have since collapsed quickly back down towards the lower end of the range.
At these lower levels we are buyers (eyeing 91.00-10 as a tasty entry level), with a stop through the 8 Jun and 10 Jun lows of 90.85 (also coinciding with the 200-day moving average at 90.91). There is further support anticipated at 90.50, but if the bears have enough gumption to get us below there then don’t expect much safety net again until 89.80 levels.
Resistance obviously remains around 92.00-10, backed up by further technical resistance at 92.36 (50-day moving average).
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It’s a big day for GBP with the latest CPI figures due at 08:30 GMT, so being nimble will be the key to successful trading on this one. Essentially we find ourselves at the upper echelons of a nascent trading range (1.4350 –1.4800) which would strongly favour short positions from a risk-reward perspective; however the short-term trend is undeniably bullish and the important data release today certainly has the stature to trigger a break-out to the topside if it comes in above estimates.
We therefore only attempt shorts at 1.4780-1.4800 with small position sizes and tight stops through 1.4820, but continue to look for opportunities to switch to going long on either dips or on a break-out higher.
Short-term support around 1.4505 (which held the pair on 10 Jun and 11 Jun) represents a decent first entry level for fresh longs, but also on a break above 1.4820 (12 May lows) we like the possibility of buying on the break-out, targeting next resistance at 1.4918 (13 May high).
It’s a big day for GBP with the latest CPI figures due at 08:30 GMT, so being nimble will be the key to successful trading on this one. Essentially we find ourselves at the upper echelons of a nascent trading range (1.4350 –1.4800) which would strongly favour short positions from a risk-reward perspective; however the short-term trend is undeniably bullish and the important data release today certainly has the stature to trigger a break-out to the topside if it comes in above estimates.
We therefore only attempt shorts at 1.4780-1.4800 with small position sizes and tight stops through 1.4820, but continue to look for opportunities to switch to going long on either dips or on a break-out higher.
Short-term support around 1.4505 (which held the pair on 10 Jun and 11 Jun) represents a decent first entry level for fresh longs, but also on a break above 1.4820 (12 May lows) we like the possibility of buying on the break-out, targeting next resistance at 1.4918 (13 May high).
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USDCHF continues to lumber lower, and indeed yesterday managed to push below the 1.1400 support level to touch 1.1350. Rather than seeing a convincing follow-through lower, however, the relief rally has since brought us back above 1.1450 –so we may be witnessing the start of a sideways trading range (much like the other majors) rather than a directional cue.
Next supports below will once again be expected at 1.1400, 1.1350 then 1.1268 (18 May low), with only weak trendline support at 1.1225 and the 50-day moving average at 1.1121.
On the topside, watch for sellers to step in around 1.1470, then again at the 1.1550 (last Friday’s highs).
USDCHF continues to lumber lower, and indeed yesterday managed to push below the 1.1400 support level to touch 1.1350. Rather than seeing a convincing follow-through lower, however, the relief rally has since brought us back above 1.1450 –so we may be witnessing the start of a sideways trading range (much like the other majors) rather than a directional cue.
Next supports below will once again be expected at 1.1400, 1.1350 then 1.1268 (18 May low), with only weak trendline support at 1.1225 and the 50-day moving average at 1.1121.
On the topside, watch for sellers to step in around 1.1470, then again at the 1.1550 (last Friday’s highs).
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Since breaking out of its 2-month downtrend channel, EURUSD has continued to edge its way higher within a 1-week uptrend channel and held very well above the important 1.2150 support. For those fans of the more exotic FX chart patterns, the recent price action looks to have carved out a bullish cup and handle pattern on the hourly chart (and shorter timeframes); with the rounded cup playing out from 4-10 June, and the consolidating handle occupying the final couple of days of last week. Given the depth of the cup is around 270 pips and the brim of the cup lies around that 1.2145, we should therefore expect a target in the region of 1.2415.
Obviously, this chart pattern is not as well-established in FX markets (being much more suitable to equity markets and longer timeframes), but we do still like a marginally more bullish bias whilst the current uptrend channel holds and would buy smalls around 1.2160-70. Expect first resistance on the topside at 1.2215 (4 Jun high) and 1.2330 (3 Jun highs).
Supports eyed on the downside come in at 1.2145 former resistance (the brim of the cup), 1.2080 (last Wednesday’s high) and then the lower edge of the current uptrend at 1.2050.
Since breaking out of its 2-month downtrend channel, EURUSD has continued to edge its way higher within a 1-week uptrend channel and held very well above the important 1.2150 support. For those fans of the more exotic FX chart patterns, the recent price action looks to have carved out a bullish cup and handle pattern on the hourly chart (and shorter timeframes); with the rounded cup playing out from 4-10 June, and the consolidating handle occupying the final couple of days of last week. Given the depth of the cup is around 270 pips and the brim of the cup lies around that 1.2145, we should therefore expect a target in the region of 1.2415.
Obviously, this chart pattern is not as well-established in FX markets (being much more suitable to equity markets and longer timeframes), but we do still like a marginally more bullish bias whilst the current uptrend channel holds and would buy smalls around 1.2160-70. Expect first resistance on the topside at 1.2215 (4 Jun high) and 1.2330 (3 Jun highs).
Supports eyed on the downside come in at 1.2145 former resistance (the brim of the cup), 1.2080 (last Wednesday’s high) and then the lower edge of the current uptrend at 1.2050.
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