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Written by Courtesy of AC-Markets
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EURUSD
It’s now been nearly three weeks that we have been locked in this well-trodden range for EURUSD, and yesterday morning’s re-test of the old 1.3700 resistance failed once more as bulls capitulated under comments from Greece’s Papandreou.
However before we simply regurgitate the same old anticipated levels of supply and demand yet again, it’s worth highlighting a new development on the hourly chart; namely a potential uptrend channel forming within the range (and broader downtrend). If this is indeed a new uptrend, then the lower bound support can be expected around 1.3580 –an area that has already acted as a pivot point during a number of prior oscillations within the current range.
Ultimately we still expect this sideways tussle to be won by the bulls, but to do that, we must first overcome 1.3700 and 1.3735 (false breakout high); even then we see a number of potent resistance levels above. 1.3800 is the long touted 50.0% fibonacci retracement of 1.2457-1.5145, with the significant downtrend resistance seen at 1.3840 currently. Just behind there lies 1.3850 major pivot level from the way down, followed by the 50-day moving average which has finally caught up some ground at 1.3949.
It’s now been nearly three weeks that we have been locked in this well-trodden range for EURUSD, and yesterday morning’s re-test of the old 1.3700 resistance failed once more as bulls capitulated under comments from Greece’s Papandreou.
However before we simply regurgitate the same old anticipated levels of supply and demand yet again, it’s worth highlighting a new development on the hourly chart; namely a potential uptrend channel forming within the range (and broader downtrend). If this is indeed a new uptrend, then the lower bound support can be expected around 1.3580 –an area that has already acted as a pivot point during a number of prior oscillations within the current range.
Ultimately we still expect this sideways tussle to be won by the bulls, but to do that, we must first overcome 1.3700 and 1.3735 (false breakout high); even then we see a number of potent resistance levels above. 1.3800 is the long touted 50.0% fibonacci retracement of 1.2457-1.5145, with the significant downtrend resistance seen at 1.3840 currently. Just behind there lies 1.3850 major pivot level from the way down, followed by the 50-day moving average which has finally caught up some ground at 1.3949.
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Written by Courtesy of AC-Markets
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USDJPY
USDJPY bulls will be feeling frustrated by the price action yesterday, as the post-payroll surging rally quickly ran out of steam against the back side of the former uptrend channel around 90.75, and since that failure the pair has traded limply back below both the 50-day and 100-day moving averages (90.59 and 90.17 respectively).
The pair now rests on prior support at 89.95, but should the buying interest wane we can expect decent bids to come in around 89.50 –the former ceiling of the trading range.
Really, for a continuation of the bullish move we need to see the pair overcome that sticky 90.50-80 zone, but as discussed yesterday, if the uptrend is re-broken the skies above there are clear for a trip to 91.90 (200-day moving average) and 92.15 resistance beyond.
USDJPY bulls will be feeling frustrated by the price action yesterday, as the post-payroll surging rally quickly ran out of steam against the back side of the former uptrend channel around 90.75, and since that failure the pair has traded limply back below both the 50-day and 100-day moving averages (90.59 and 90.17 respectively).
The pair now rests on prior support at 89.95, but should the buying interest wane we can expect decent bids to come in around 89.50 –the former ceiling of the trading range.
Really, for a continuation of the bullish move we need to see the pair overcome that sticky 90.50-80 zone, but as discussed yesterday, if the uptrend is re-broken the skies above there are clear for a trip to 91.90 (200-day moving average) and 92.15 resistance beyond.
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GBPUSD
A great big head-fake from GBPUSD yesterday, as the breach of the 6 week downtrend channel at 1.5160 was completely reversed in the afternoon session, and even went so far as breaching the lower bound of the nascent uptrend.
We still believe there are decent arguments for a bullish correction from here however; firstly, the hammer candlestick on the weekly chart which is suggestive of a reversal of the prevailing downtrend, secondly our 1 hour stochastic oscillator has crossed upwards from deeply oversold territory, and thirdly the decent buying interest around 1.4975 looks to be providing a near-term floor to sell-offs.
Nevertheless, expect resistance levels above here to come in the form of 1.5100 downtrend channel resistance, the back side of the former uptrend at 1.5125, then the psychologically important 1.5200 level where we failed yesterday.
A great big head-fake from GBPUSD yesterday, as the breach of the 6 week downtrend channel at 1.5160 was completely reversed in the afternoon session, and even went so far as breaching the lower bound of the nascent uptrend.
We still believe there are decent arguments for a bullish correction from here however; firstly, the hammer candlestick on the weekly chart which is suggestive of a reversal of the prevailing downtrend, secondly our 1 hour stochastic oscillator has crossed upwards from deeply oversold territory, and thirdly the decent buying interest around 1.4975 looks to be providing a near-term floor to sell-offs.
Nevertheless, expect resistance levels above here to come in the form of 1.5100 downtrend channel resistance, the back side of the former uptrend at 1.5125, then the psychologically important 1.5200 level where we failed yesterday.
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EURUSD
After the better than expected NFP on Friday, EURUSD’s sell-off could only push as far as 1.3531 before a surge of strong buying interest kicked in that has continued into the start of this week. We are now back testing the 1.3700 original range highs, but as of yet have not made a challenge on 1.3735 where the pair stalled on the breakout from Wednesday.
For the time being the range still holds, but we believe the break of the former downtrend channel is a significant signal that a bullish reversal is due on this pair. Expect the break of 1.3700 to pause once more at 1.3735 until offers are exhausted, and then next stop above is likely to be 1.3800 resistance (and 50.0% fibonacci retracement of 1.2457-1.5145)
Until a confirmed break out materializes there is very little to add to the discussion on this pair; main support levels on the downside still remain at 1.3425-44 area and 1.3090.
After the better than expected NFP on Friday, EURUSD’s sell-off could only push as far as 1.3531 before a surge of strong buying interest kicked in that has continued into the start of this week. We are now back testing the 1.3700 original range highs, but as of yet have not made a challenge on 1.3735 where the pair stalled on the breakout from Wednesday.
For the time being the range still holds, but we believe the break of the former downtrend channel is a significant signal that a bullish reversal is due on this pair. Expect the break of 1.3700 to pause once more at 1.3735 until offers are exhausted, and then next stop above is likely to be 1.3800 resistance (and 50.0% fibonacci retracement of 1.2457-1.5145)
Until a confirmed break out materializes there is very little to add to the discussion on this pair; main support levels on the downside still remain at 1.3425-44 area and 1.3090.
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USDJPY
USDJPY took off like an absolute rocket post-payrolls, blasting through the important 89.50 resistance level with ease, and ensuring buying interest has continued into the start of this week. The 100 day moving average coming in at 90.63 has however made any further progress sticky, and the high so far today of 90.68 was within 10 pips of the back side of our former uptrend channel from early February.
This trendline now comes in at 90.79 so expect sellers to come in again if we get close, but should the market manage to push above these technical headwinds around 90.70, there are clear skies above until 91.93 (200 day moving average) and 92.15 major resistance just beyond.
Supports on the downside are eyed at 89.95 and then again at the 89.50 resistance-turned-support.
USDJPY took off like an absolute rocket post-payrolls, blasting through the important 89.50 resistance level with ease, and ensuring buying interest has continued into the start of this week. The 100 day moving average coming in at 90.63 has however made any further progress sticky, and the high so far today of 90.68 was within 10 pips of the back side of our former uptrend channel from early February.
This trendline now comes in at 90.79 so expect sellers to come in again if we get close, but should the market manage to push above these technical headwinds around 90.70, there are clear skies above until 91.93 (200 day moving average) and 92.15 major resistance just beyond.
Supports on the downside are eyed at 89.95 and then again at the 89.50 resistance-turned-support.
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GBPUSD
It’s been third time lucky for GBPUSD which has finally managed to burst through 1.5140 resistance after the risk rally initiated on Friday. Admittedly, the move negates our rising wedge scenario suggested last week, coming within a whisker of 1.5200 resistance, but more significantly appearing to have breached the 6 week downtrend channel at 1.5160. If GBPUSD holds above this trendline, it could be the first sign of a reversal coming for the long suffering pair.
The 1 week uptrend channel frames our short term view; with good selling interest expected to come in at the upper bound of 1.5278 (also coinciding with the 50.0% fibonacci level at 1.5274), and the lower bound at 1.5070 providing support.
The 14-day RSI has crept back above the 30 level to 38 so far, which also suggests that bears are taking some of their pressure off the market, so we focus our sights on the levels above at 1.5350 and 1.5615 in extension.
It’s been third time lucky for GBPUSD which has finally managed to burst through 1.5140 resistance after the risk rally initiated on Friday. Admittedly, the move negates our rising wedge scenario suggested last week, coming within a whisker of 1.5200 resistance, but more significantly appearing to have breached the 6 week downtrend channel at 1.5160. If GBPUSD holds above this trendline, it could be the first sign of a reversal coming for the long suffering pair.
The 1 week uptrend channel frames our short term view; with good selling interest expected to come in at the upper bound of 1.5278 (also coinciding with the 50.0% fibonacci level at 1.5274), and the lower bound at 1.5070 providing support.
The 14-day RSI has crept back above the 30 level to 38 so far, which also suggests that bears are taking some of their pressure off the market, so we focus our sights on the levels above at 1.5350 and 1.5615 in extension.
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EURUSD
Despite the encouraging uptake of Greek debt this week, EURUSD is still finding it heavy going –and who can blame it after Moody’s latest downgrade of Deutsche Bank by two notches to AA1/C+. Now, the pair has slumped right back into its range territory below 1.3600, and notably, the price action in the past two days has carved out a bearish engulfing candlestick pattern on the daily chart; a formation that tends to suggest the bulls have been exhausted by the bears, and further selling interest is likely to push the pair lower in subsequent sessions.
The shadow of non-farm payrolls on the horizon means participation is probably going to be excruciatingly light this morning, so range trading will be the most rewarding strategy to pursue ahead of the release. Some support expected to come in around 1.3550, and sellers lurk around 1.3625 so we would use these levels to guide our short term trade entry.
The bigger picture technical levels remain intact either side of today’s mini-range; on the topside 1.3700 -30 was the zone where we stalled last time, and above there the 1.3800 fibonacci level (50% retracement of 1.2457-1.5145). On the downside, 1.3425-44 area is the main cushion of bids ahead of 1.3090.
Despite the encouraging uptake of Greek debt this week, EURUSD is still finding it heavy going –and who can blame it after Moody’s latest downgrade of Deutsche Bank by two notches to AA1/C+. Now, the pair has slumped right back into its range territory below 1.3600, and notably, the price action in the past two days has carved out a bearish engulfing candlestick pattern on the daily chart; a formation that tends to suggest the bulls have been exhausted by the bears, and further selling interest is likely to push the pair lower in subsequent sessions.
The shadow of non-farm payrolls on the horizon means participation is probably going to be excruciatingly light this morning, so range trading will be the most rewarding strategy to pursue ahead of the release. Some support expected to come in around 1.3550, and sellers lurk around 1.3625 so we would use these levels to guide our short term trade entry.
The bigger picture technical levels remain intact either side of today’s mini-range; on the topside 1.3700 -30 was the zone where we stalled last time, and above there the 1.3800 fibonacci level (50% retracement of 1.2457-1.5145). On the downside, 1.3425-44 area is the main cushion of bids ahead of 1.3090.
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USDJPY
Hawkish Bullard rhetoric combined with a rumoured spurt of Middle Eastern buying of USDJPY yesterday afternoon was enough to blow through the 1 week downtrend channel at 88.55, and the pair now looks to be threatening the stubborn upside resistance at 89.50. This 89.50 level has been bullet-proof since 25th Feb; so any break above may be an early signal of an impending correction higher. Much like EURUSD, the price action on the daily chart has formed an engulfing candlestick (albeit the bullish form in this instance), which will come as welcome relief to the bulls battered and bruised from recent JPY strength.
Numerous resistance levels above will however make tough work of any rallies, with the 100 day moving average at 90.17, prior resistance and fibonnacci level at 90.35 (38.2% of 84.83-93.77) and the 50 day moving average at 90.63. Nevertheless the NFPs later today certainly give us the potential catalyst for such a move, especially if there’s a shock positive print in the payrolls.
Supports on the downside are eyed at 88.15 (yesterday’s lows), then 87.37 (last seen 9 Dec).
Hawkish Bullard rhetoric combined with a rumoured spurt of Middle Eastern buying of USDJPY yesterday afternoon was enough to blow through the 1 week downtrend channel at 88.55, and the pair now looks to be threatening the stubborn upside resistance at 89.50. This 89.50 level has been bullet-proof since 25th Feb; so any break above may be an early signal of an impending correction higher. Much like EURUSD, the price action on the daily chart has formed an engulfing candlestick (albeit the bullish form in this instance), which will come as welcome relief to the bulls battered and bruised from recent JPY strength.
Numerous resistance levels above will however make tough work of any rallies, with the 100 day moving average at 90.17, prior resistance and fibonnacci level at 90.35 (38.2% of 84.83-93.77) and the 50 day moving average at 90.63. Nevertheless the NFPs later today certainly give us the potential catalyst for such a move, especially if there’s a shock positive print in the payrolls.
Supports on the downside are eyed at 88.15 (yesterday’s lows), then 87.37 (last seen 9 Dec).
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