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The back side of this old downtrend is providing a fantastic barrier to sell USDCHF into, and after going short at 1.1115we got a nice extension down towards 1.1035 levels. The overnight rebound is a clear invite to repeat the process again, so we aim to sell just ahead of the trendline (now 1.1100), and aim for 50-60 pips of downside.
We still feel that ultimately another re-test of 1.1000 is on the cards in this pair but with the prospect of an FOMC meeting later this evening we are wary to let greed get the better of us and would happily keep banking 50 pip profits where we can find them. 1.0998 is the reaction low seen at the start of the week in Asia (post-China de-pegging), but should the move extend further, next major support is expected at 1.0924-37. This area harbours 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 probably struggle back up towards the former trendline at 1.1100, with the 50-day moving average also hanging above at 1.1191.
The back side of this old downtrend is providing a fantastic barrier to sell USDCHF into, and after going short at 1.1115we got a nice extension down towards 1.1035 levels. The overnight rebound is a clear invite to repeat the process again, so we aim to sell just ahead of the trendline (now 1.1100), and aim for 50-60 pips of downside.
We still feel that ultimately another re-test of 1.1000 is on the cards in this pair but with the prospect of an FOMC meeting later this evening we are wary to let greed get the better of us and would happily keep banking 50 pip profits where we can find them. 1.0998 is the reaction low seen at the start of the week in Asia (post-China de-pegging), but should the move extend further, next major support is expected at 1.0924-37. This area harbours 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 probably struggle back up towards the former trendline at 1.1100, with the 50-day moving average also hanging above at 1.1191.
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Osborne’s super-ambitious budget yesterday looks to have set the right tone in the market and triggered a short squeeze in GBPUSD off the 1.4688 lows back up towards 1.4850.
In contrast to yesterday’s bearish bias, we now see a possible bullish pennant on the hourly chart, so aim to go long on a break above 1.4840-50 with a stop around 1.4800, and set our target back at the psychologically important 1.5000 level.
We are still wary that sellers may be poised to step in at the back side of the former 2-week uptrend (currently 1.4915), so it may be worth playing this a little conservatively and taking half our position off the table around there. What is encouraging however, is that unlike yesterday where the back side of the uptrend had the added protection of the 50-day moving average ahead of it, the rally yesterday has blasted us well clear of that indicator (1.4837 today) and indeed it should now act as a very weak support below.
Next resistance beyond will be 1.4936 high from Monday morning. Key support on the downside is now yesterday’s low 1.4688, then 17 Jun low of 1.4645, with a break below there likely to open up a move to the 10 & 11 Jun lows around 1.4505.
Osborne’s super-ambitious budget yesterday looks to have set the right tone in the market and triggered a short squeeze in GBPUSD off the 1.4688 lows back up towards 1.4850.
In contrast to yesterday’s bearish bias, we now see a possible bullish pennant on the hourly chart, so aim to go long on a break above 1.4840-50 with a stop around 1.4800, and set our target back at the psychologically important 1.5000 level.
We are still wary that sellers may be poised to step in at the back side of the former 2-week uptrend (currently 1.4915), so it may be worth playing this a little conservatively and taking half our position off the table around there. What is encouraging however, is that unlike yesterday where the back side of the uptrend had the added protection of the 50-day moving average ahead of it, the rally yesterday has blasted us well clear of that indicator (1.4837 today) and indeed it should now act as a very weak support below.
Next resistance beyond will be 1.4936 high from Monday morning. Key support on the downside is now yesterday’s low 1.4688, then 17 Jun low of 1.4645, with a break below there likely to open up a move to the 10 & 11 Jun lows around 1.4505.
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It’s been all downhill since yesterday’s failed efforts to tackle the daily cloud cover (lower boundary now seen at 91.15); and with the 1-week downtrend still in command the pair has slumped all the way back down to 90.33.
Thus far, we haven’t challenged Monday’s low at 90.26 so watch for this to provide support on a first touch, with the critical support below there at 89.80 –this latter level is doubly important today as it also coincides with the lower edge of the 1-week downtrend and as such might be worth a punt on the long side.
Rebound rallies from here will meet trendline resistance at 91.15 (note this is identical to the base of the daily cloud cover) with the plethora of resistance levels mentioned yesterday just above; these are seen at Monday’s 91.48 high, the 100-day moving average at 91.57, and last Wednesday’s highs at 91.82.
It’s been all downhill since yesterday’s failed efforts to tackle the daily cloud cover (lower boundary now seen at 91.15); and with the 1-week downtrend still in command the pair has slumped all the way back down to 90.33.
Thus far, we haven’t challenged Monday’s low at 90.26 so watch for this to provide support on a first touch, with the critical support below there at 89.80 –this latter level is doubly important today as it also coincides with the lower edge of the 1-week downtrend and as such might be worth a punt on the long side.
Rebound rallies from here will meet trendline resistance at 91.15 (note this is identical to the base of the daily cloud cover) with the plethora of resistance levels mentioned yesterday just above; these are seen at Monday’s 91.48 high, the 100-day moving average at 91.57, and last Wednesday’s highs at 91.82.
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EURUSD continued to drift lower yesterday as the S&P slumped towards a daily close below its 200-day moving average; however as we had hoped, 1.2240 support managed to catch the sell-off and from here we feel that a rebound is likely back towards 1.2350 levels.
As discussed yesterday, none of the recent news or price action warrants a strong directional bias yet, so we are happy relying on 1.2240 as a range floor; especially considering it has the dual potency of being the 17 Jun lows and the 38.2% fibonacci retracement of the rally from 1.1876 –1.2468. Should the sell-off breach that 1.2240 level however, then bears are likely to jump back into the market en masse (worth switching to a short position on the break-out), with next areas of demand anticipated around 1.2170 (where the 15 Jun lows coincide with the 50.0% fibonacci retracement), 1.2145 former pivot level, and then 1.2045 (11 Jun low).
Until that point, we will buy on dips to 1.2240, expecting possible resistance around 1.2328 (23.6% fibonacci retracement) before the range ceiling 1.2350. Should bullish momentum continue through 1.2350, expect plenty of sellers to lurk around 1.2450-70 (28 May high at 1.2452, recent double top highs 1.2468).
EURUSD continued to drift lower yesterday as the S&P slumped towards a daily close below its 200-day moving average; however as we had hoped, 1.2240 support managed to catch the sell-off and from here we feel that a rebound is likely back towards 1.2350 levels.
As discussed yesterday, none of the recent news or price action warrants a strong directional bias yet, so we are happy relying on 1.2240 as a range floor; especially considering it has the dual potency of being the 17 Jun lows and the 38.2% fibonacci retracement of the rally from 1.1876 –1.2468. Should the sell-off breach that 1.2240 level however, then bears are likely to jump back into the market en masse (worth switching to a short position on the break-out), with next areas of demand anticipated around 1.2170 (where the 15 Jun lows coincide with the 50.0% fibonacci retracement), 1.2145 former pivot level, and then 1.2045 (11 Jun low).
Until that point, we will buy on dips to 1.2240, expecting possible resistance around 1.2328 (23.6% fibonacci retracement) before the range ceiling 1.2350. Should bullish momentum continue through 1.2350, expect plenty of sellers to lurk around 1.2450-70 (28 May high at 1.2452, recent double top highs 1.2468).
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The USD rally yesterday presented us with a juicy opportunity to reload short USDCHF positions back towards former trendline resistance (now seen at 1.1130), so this morning we have got in and sold at 1.1115; setting a stop at 1.1150 to give us a little headroom above yesterday’s 1.1138 high.
Very weak short term support is anticipated at 1.1070 (this week’s European lows), but besides that the path is very clear for another re-test of 1.1000. Given the couple of dips through 1.1010 at the open on Monday (1.0998 being the crucial low) we would look to be a bit conservative in our target, aiming for 1.1030 as a decent take profit level.
Should the move extend further, next major support is expected at 1.0924-33 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 probably struggle back up towards the former trendline at 1.1130, with the 50-day moving average also hanging above at 1.1180.
The USD rally yesterday presented us with a juicy opportunity to reload short USDCHF positions back towards former trendline resistance (now seen at 1.1130), so this morning we have got in and sold at 1.1115; setting a stop at 1.1150 to give us a little headroom above yesterday’s 1.1138 high.
Very weak short term support is anticipated at 1.1070 (this week’s European lows), but besides that the path is very clear for another re-test of 1.1000. Given the couple of dips through 1.1010 at the open on Monday (1.0998 being the crucial low) we would look to be a bit conservative in our target, aiming for 1.1030 as a decent take profit level.
Should the move extend further, next major support is expected at 1.0924-33 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 probably struggle back up towards the former trendline at 1.1130, with the 50-day moving average also hanging above at 1.1180.
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In parallel with EURUSD’s break of its 2-week uptrend channel, GBPUSD has slumped through trendline support at 1.4825, and the momentum has been sufficient to take us through Friday’s lows of 1.4740.
Expect a lot of nervousness and anticipation ahead of today’s emergency budget so for the time being we are on the sidelines, with a preference to go short on rallies. Ideal area to sell would be back up towards the back side of that 2-week uptrend channel (currently 1.4865); however given the possibility that some sellers may get in ahead of us around the 50-day moving average of 1.4847, we leave our limit order at 1.4840.
Key support on the downside is 17 Jun low of 1.4645, with a break below there likely to open up a move to the 10 & 11 Jun lows around 1.4505.
In parallel with EURUSD’s break of its 2-week uptrend channel, GBPUSD has slumped through trendline support at 1.4825, and the momentum has been sufficient to take us through Friday’s lows of 1.4740.
Expect a lot of nervousness and anticipation ahead of today’s emergency budget so for the time being we are on the sidelines, with a preference to go short on rallies. Ideal area to sell would be back up towards the back side of that 2-week uptrend channel (currently 1.4865); however given the possibility that some sellers may get in ahead of us around the 50-day moving average of 1.4847, we leave our limit order at 1.4840.
Key support on the downside is 17 Jun low of 1.4645, with a break below there likely to open up a move to the 10 & 11 Jun lows around 1.4505.
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Despite an impressive short squeeze yesterday from 90.26 lows all the way up to 91.48 (the lower edge of the ichimoku daily cloud cover), the bears have stepped in once again to bat the pair lower, and we are now trading back below the 200-day moving average 90.90.
We now see a new 1-week downtrend channel in play on the hourly chart, and expect trendline resistance to therefore come into play at 91.30. Any attempts to break higher will find it’s incredibly sticky going with the plethora of resistance levels just above; these are seen at yesterday’s 91.48 highs (daily cloud cover now 91.49), the 50-day moving average at 91.57, and last Wednesday’s highs at 91.82.
Given the rapidity of the move yesterday, there’s actually not much in the way of discernible support until we hit 90.26 levels again (yesterday’s low), and as ever, 89.80 remains the critical support below.
Despite an impressive short squeeze yesterday from 90.26 lows all the way up to 91.48 (the lower edge of the ichimoku daily cloud cover), the bears have stepped in once again to bat the pair lower, and we are now trading back below the 200-day moving average 90.90.
We now see a new 1-week downtrend channel in play on the hourly chart, and expect trendline resistance to therefore come into play at 91.30. Any attempts to break higher will find it’s incredibly sticky going with the plethora of resistance levels just above; these are seen at yesterday’s 91.48 highs (daily cloud cover now 91.49), the 50-day moving average at 91.57, and last Wednesday’s highs at 91.82.
Given the rapidity of the move yesterday, there’s actually not much in the way of discernible support until we hit 90.26 levels again (yesterday’s low), and as ever, 89.80 remains the critical support below.
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The USD rally yesterday presented us with a juicy opportunity to reload short USDCHF positions back towards former trendline resistance (now seen at 1.1130), so this morning we have got in and sold at 1.1115; setting a stop at 1.1150 to give us a little headroom above yesterday’s 1.1138 high.
Very weak short term support is anticipated at 1.1070 (this week’s European lows), but besides that the path is very clear for another re-test of 1.1000. Given the couple of dips through 1.1010 at the open on Monday (1.0998 being the crucial low) we would look to be a bit conservative in our target, aiming for 1.1030 as a decent take profit level.
Should the move extend further, next major support is expected at 1.0924-33 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 probably struggle back up towards the former trendline at 1.1130, with the 50-day moving average also hanging above at 1.1180.
With a double failure to overcome resistance at 1.2468 and the ominous sign of a harami cross on the daily chart at the end of last week (see yesterday’s report) the bulls finally gave up defending the 2-week uptrend channel at 1.2395, and since then the slump has taken us all the way back down to lows of 1.2284.
From here our directional view is neutral, so we look to play the range between the short-term pivot level at 1.2350 (recent support and overnight rebound high) and the next support below at 1.2240. This latter level takes on a dual significance as not only 17 Jun lows, but also the 38.2% fibonacci retracement of the rally from 1.1876 –1.2468.
Should the sell-off breach that 1.2240 level, then next areas of demand should be anticipated around 1.2170 (where the 15 Jun lows coincide with the 50.0% fibonacci retracement), 1.2145 former pivot level, and then 1.2045 (11 Jun low). In contrast, if the price action resumes on an upward trajectory then expect plenty of sellers to block the route through 1.2440-70 as this area contains the back side of the former 2-week uptrend at 1.2440, the 28 May high at 1.2452, and the recent double top highs 1.2468.
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