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EURUSD
EURUSD continues to work its way higher within a 3-4 week uptrend channel, and just as we had forecast last week, the daily break above the 100-day moving average eventually led to another visit to major 1.3000 resistance (high 1.3007).
Also in line with our predictions, the bulls have had to pause for breath on the first lunge at these lofty levels, a hiatus that has allowed the pair to drift back down to an intraday low of 1.2871. Should the bullish momentum resume, the levels to watch above remain at 1.3000, 1.3035 (uptrend channel resistance) and 1.3093 (10 May high). We however still feel that current levels are a bit rich to entice us back into longs, especially considering the shooting star pattern seen on the daily chart on Friday which suggests a reversal is possible. Instead, we look for a deeper correction back towards 1.2800 before we step back in.
Nearest supports are seen at 1.2911 (100-day moving average), 1.2871 (today’s low), 1.2780 (a former pivot), and 1.2683 (last Wednesday’s low).
EURUSD continues to work its way higher within a 3-4 week uptrend channel, and just as we had forecast last week, the daily break above the 100-day moving average eventually led to another visit to major 1.3000 resistance (high 1.3007).
Also in line with our predictions, the bulls have had to pause for breath on the first lunge at these lofty levels, a hiatus that has allowed the pair to drift back down to an intraday low of 1.2871. Should the bullish momentum resume, the levels to watch above remain at 1.3000, 1.3035 (uptrend channel resistance) and 1.3093 (10 May high). We however still feel that current levels are a bit rich to entice us back into longs, especially considering the shooting star pattern seen on the daily chart on Friday which suggests a reversal is possible. Instead, we look for a deeper correction back towards 1.2800 before we step back in.
Nearest supports are seen at 1.2911 (100-day moving average), 1.2871 (today’s low), 1.2780 (a former pivot), and 1.2683 (last Wednesday’s low).
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USDJPY
USDJPY is still in the grip of a powerful bearish trend, and that selling pressure has now seen major support at 86.97 (1 Jul low) overwhelmed into submission, opening up the possibility of another plunge back towards the November 2009 low of 84.83 in the coming days.
On the hourly chart, we see a potential bearish pennant pattern in play which would suggest going short on a break below 86.55, and aiming for a target of 85.60. Strong selling interest is likely to precipitate back up towards 86.97 so a sensible stop level seems to be just above 87.00.
Even a feisty short squeeze higher is unlikely to have the gumption to overcome the supply left lurking around 88.00, 89.15 (12 Jul high), and 89.50 (28-29 Jun high). As such, the risk-reward profile strongly favours short positions, although we assert one cautionary note that despite the downside being by far the path of least resistance, the BoJ could be waiting in the wings to prevent an all-out USDJPY collapse –and if they do step in to sell JPY, don’t expect a gentle ride back higher.
USDJPY is still in the grip of a powerful bearish trend, and that selling pressure has now seen major support at 86.97 (1 Jul low) overwhelmed into submission, opening up the possibility of another plunge back towards the November 2009 low of 84.83 in the coming days.
On the hourly chart, we see a potential bearish pennant pattern in play which would suggest going short on a break below 86.55, and aiming for a target of 85.60. Strong selling interest is likely to precipitate back up towards 86.97 so a sensible stop level seems to be just above 87.00.
Even a feisty short squeeze higher is unlikely to have the gumption to overcome the supply left lurking around 88.00, 89.15 (12 Jul high), and 89.50 (28-29 Jun high). As such, the risk-reward profile strongly favours short positions, although we assert one cautionary note that despite the downside being by far the path of least resistance, the BoJ could be waiting in the wings to prevent an all-out USDJPY collapse –and if they do step in to sell JPY, don’t expect a gentle ride back higher.
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GBPUSD
GBPUSD’s soaring rally has finally started to show some signs of easing up, but despite the break through some recent uptrend supports, the pair still looks comfortably buoyed above 1.5230.
We now treat that 1.5230 level as a pivot for our trading strategy, looking to buy on dips below 1.5250, but willing to flip to a short position should we happen to break below it. The targets on the topside are eyed around Thursday’s high of 1.5472, then next resistance levels on the topside at 1.5525 (15 Apr high) and 1.5580 (200-day moving average).
Should our bullish bias be compromised by a fresh break below 1.5230, we would expect next supports at the 1.5080 former neckline, 100-day moving average 1.4988, then the 12 Jul low 1.4949.
GBPUSD’s soaring rally has finally started to show some signs of easing up, but despite the break through some recent uptrend supports, the pair still looks comfortably buoyed above 1.5230.
We now treat that 1.5230 level as a pivot for our trading strategy, looking to buy on dips below 1.5250, but willing to flip to a short position should we happen to break below it. The targets on the topside are eyed around Thursday’s high of 1.5472, then next resistance levels on the topside at 1.5525 (15 Apr high) and 1.5580 (200-day moving average).
Should our bullish bias be compromised by a fresh break below 1.5230, we would expect next supports at the 1.5080 former neckline, 100-day moving average 1.4988, then the 12 Jul low 1.4949.
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USDCHF
The 3-week downtrend channel continues to direct price action in the short term, but thus far the bears have not managed to muster a decent attempt at breaking below 1.0400 despite a couple of attempts late last week.
For now, the ranges are a bit too tight for us to get in at current levels with any sort of attractive risk-reward (pair currently trading around 1.0460), so we wait on the sidelines until we are closer to the defined technical levels or a decent break-out either way gives us the signal to re-enter the market. Our preference is still for this pair to head lower in the medium term, so we would be tempted to sell on any rally towards Friday’s high of 1.0550, as this comes with the added resistance of the downtrend at 1.0560 just behind.
Some bulls may favour buying on the dips towards, 1.0400, but the landscape below 1.0400 is only dotted with stale support levels at 1.0365, 1.0315 (trendline support), then 1.0230.
The 3-week downtrend channel continues to direct price action in the short term, but thus far the bears have not managed to muster a decent attempt at breaking below 1.0400 despite a couple of attempts late last week.
For now, the ranges are a bit too tight for us to get in at current levels with any sort of attractive risk-reward (pair currently trading around 1.0460), so we wait on the sidelines until we are closer to the defined technical levels or a decent break-out either way gives us the signal to re-enter the market. Our preference is still for this pair to head lower in the medium term, so we would be tempted to sell on any rally towards Friday’s high of 1.0550, as this comes with the added resistance of the downtrend at 1.0560 just behind.
Some bulls may favour buying on the dips towards, 1.0400, but the landscape below 1.0400 is only dotted with stale support levels at 1.0365, 1.0315 (trendline support), then 1.0230.
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USDCHF
After Wednesday’s short squeeze came to an abrupt halt at 1.1138 (identical to last Monday’s high), the bears have jumped all over this pair and the relentless downward pressure has now taken us all the way to lows of 1.0850.
The downside now looks extremely vulnerable; with next support not anticipated until 1.0770 (where a shallow trendline support is eyed), then 1.0732 (2 May low), so really this looks like a sell-on-rallies-pair from here.
Ideally, we would like to see a bounce back towards 1.0924 (the low from 10 May) to get in on the short trade; knowing that the 100-day moving average lies just above there at 1.0945 and decent selling interest is likely to lurk ahead of 1.0975 where the upper edge of our 3-week downtrend channel also comes in today.
After Wednesday’s short squeeze came to an abrupt halt at 1.1138 (identical to last Monday’s high), the bears have jumped all over this pair and the relentless downward pressure has now taken us all the way to lows of 1.0850.
The downside now looks extremely vulnerable; with next support not anticipated until 1.0770 (where a shallow trendline support is eyed), then 1.0732 (2 May low), so really this looks like a sell-on-rallies-pair from here.
Ideally, we would like to see a bounce back towards 1.0924 (the low from 10 May) to get in on the short trade; knowing that the 100-day moving average lies just above there at 1.0945 and decent selling interest is likely to lurk ahead of 1.0975 where the upper edge of our 3-week downtrend channel also comes in today.
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GBPUSD
As if we didn’t get have enough grief worrying about the England match, there was further frustration on Friday as we just missed the entry price where we had hoped to go long GBPUSD (1.4850), and instead after seeing it plunge as far as 1.4857, the pair rocketed higher to hit highs of 1.5073 –well in excess of our 1.5000 target. Grrr.
Those highs and the current price both lie above the 100-day moving average (1.5039) and the 5-week uptrend channel we have been tracking on the hourly chart, but the extension higher has been limited by resistance around 1.5055 (10 May high).
The psychologically important 1.5000 level below should now act as a support level for further gains, but be wary that any sudden plunge through there leaves very little support blow before 1.4850 again. On the topside, next resistance above 1.5073 is due at 1.5150 (top edge of a 3-week uptrend channel), then 1.5210 last seen 4 May.
As if we didn’t get have enough grief worrying about the England match, there was further frustration on Friday as we just missed the entry price where we had hoped to go long GBPUSD (1.4850), and instead after seeing it plunge as far as 1.4857, the pair rocketed higher to hit highs of 1.5073 –well in excess of our 1.5000 target. Grrr.
Those highs and the current price both lie above the 100-day moving average (1.5039) and the 5-week uptrend channel we have been tracking on the hourly chart, but the extension higher has been limited by resistance around 1.5055 (10 May high).
The psychologically important 1.5000 level below should now act as a support level for further gains, but be wary that any sudden plunge through there leaves very little support blow before 1.4850 again. On the topside, next resistance above 1.5073 is due at 1.5150 (top edge of a 3-week uptrend channel), then 1.5210 last seen 4 May.
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USDJPY
The encouraging pledges from the weekend’s G20 summit has certainly stemmed the blood loss in USDJPY, but the overriding bear trend is still fully operational and likely to weigh on rallies in the short-term.
The 89.15-25 area of support has been the platform for a small bounce this morning –but only as far as 89.46, and given the continued pressure on US yields we would not be surprised to see another dip to the vulnerable supports below; 88.95 (20 May low and lower edge of the 3-week downtrend), then 87.99 (low from 6 May).
Expect price action to be very sticky through today’s highs (89.46), and around last week’s pivot level 89.75; with further sellers predicted around 90.00 and the 200-day moving average 90.87.
The encouraging pledges from the weekend’s G20 summit has certainly stemmed the blood loss in USDJPY, but the overriding bear trend is still fully operational and likely to weigh on rallies in the short-term.
The 89.15-25 area of support has been the platform for a small bounce this morning –but only as far as 89.46, and given the continued pressure on US yields we would not be surprised to see another dip to the vulnerable supports below; 88.95 (20 May low and lower edge of the 3-week downtrend), then 87.99 (low from 6 May).
Expect price action to be very sticky through today’s highs (89.46), and around last week’s pivot level 89.75; with further sellers predicted around 90.00 and the 200-day moving average 90.87.
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EURUSD
Let’s confront the elephant in the room right away; yes, 4-1 is a shocker of a result against the Germans –it’s a sombre mood on the ACM strategy desk today. But on the bright side, have got Slovakia in the office sweepstake so there’s still one chance at glory alive and kicking...
In the meantime, EURUSD looks to be on the path to further gains after breaking above its 1-week downtrend on Friday, and after a sluggish start from Asian equities this week we may be able to get in on a quick long trade on a dip back towards that trendline. Currently the back side of the downtrend is seen at 1.2300 so we’d be happy getting long there, setting a stop just below the 1.2260 support (which supported the pair during the latter part of last week), and looking for another visit to 1.2400 (overnight high 1.2406).
Above 1.2400, the next resistance levels are eyed at 1.2468 (18 Jun and 21 Jun highs) the 50-day moving average at 1.2555, then the 1.2600 level last seen on 21 May.
Should the re-test of the old downtrend break, then we still expect some protection at 1.2290 just below (where a very short-term uptrend comes in today), 1.2260 (as discussed above), 1.2209 (the low water mark last week) and 1.2170 (where the 15 Jun lows coincide with the 50.0% fibonacci retracement of 1.1827 -1.2468).
Let’s confront the elephant in the room right away; yes, 4-1 is a shocker of a result against the Germans –it’s a sombre mood on the ACM strategy desk today. But on the bright side, have got Slovakia in the office sweepstake so there’s still one chance at glory alive and kicking...
In the meantime, EURUSD looks to be on the path to further gains after breaking above its 1-week downtrend on Friday, and after a sluggish start from Asian equities this week we may be able to get in on a quick long trade on a dip back towards that trendline. Currently the back side of the downtrend is seen at 1.2300 so we’d be happy getting long there, setting a stop just below the 1.2260 support (which supported the pair during the latter part of last week), and looking for another visit to 1.2400 (overnight high 1.2406).
Above 1.2400, the next resistance levels are eyed at 1.2468 (18 Jun and 21 Jun highs) the 50-day moving average at 1.2555, then the 1.2600 level last seen on 21 May.
Should the re-test of the old downtrend break, then we still expect some protection at 1.2290 just below (where a very short-term uptrend comes in today), 1.2260 (as discussed above), 1.2209 (the low water mark last week) and 1.2170 (where the 15 Jun lows coincide with the 50.0% fibonacci retracement of 1.1827 -1.2468).
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