The EURUSD was indecisive yesterday. The bias remains bearish in nearest term testing 1.0600 area. Immediate resistance remains at 1.0700. A clear break above that area could lead price to neutral zone in nearest term but only a clear break back above 1.0750 would interrupt the current short-term bearish bias following the appearance of a “shooting star” formation on daily chart last week. On the downside, a clear break and daily close below 1.0600 would expose 1.0500 this week. Overall I remain neutral.
EUR/USD continued to be pressured on Monday – extending the US dollar rebound that has been in place since early last week – ahead of major economic data and events coming out of the US in the week ahead. EUR/USD's sharp breakdown for the past week has pared, by more than half, its recent rise during most of March, when the dollar had been pulling back substantially. With the dollar currently in rebound mode, this week's upcoming economic releases will likely have a strong impact on whether the dollar recovery continues.
Sterling fell across the board early on Monday due in part to key manufacturing data from the UK that fell short of expectations. The UK's manufacturing PMI for March came in at 54.2, which still represents an expansion, but fell below expectations for 55.1 and slightly below the previous month's result.
The Australian SPI200 index has finally broken through the resistance level that we watched go from a double top to a triple top over the last month or so. As you can see clearly on the daily chart above, price has broken through the level and has pulled back to retest the broken support as resistance.
Downside risk is growing in the near-term as cable is probing into daily cloud and weakness dented next support at 1.2485 (Fibo 38.2% of 1.2374/1.2613 rally, reinforced by rising 10SMA). Easing from fresh recovery high at 1.2553 was accelerated by today's UK Manufacturing PMI miss (Mar 54.2 vs 55.1 f/c and 54.5 in Feb).
WTI oil is holding above broken key barriers at $50.00/10 (psychological barrier / Fibo 38.2% of $55.01/$47.06 descend) that were taken out on last week's strong bullish acceleration from base that was formed at $47.00 zone. Recovery rally peaked at $50.83 on Friday (the highest of past three weeks) where rally was temporarily capped by daily Kijun-sen line, ahead of next targets at $51.03/14 (50% retracement of $55.01/$47.06 / 100SMA).
The DAX Index has edged lower in the Monday session, as the DAX trades at 12,366.50. On the release front, it's a very busy start to the week. German and Eurozone Manufacturing PMIs continue to point to expansion. Both indexes improved in March, with readings of 58.3 and 56.3, respectively. Elsewhere in the eurozone, PPI came in at 0.2%, above the forecast of 0.0%. The unemployment rate edged lower to 9.5%, matching the forecast.
EUR/USD is showing little movement in the Monday session. Currently, the pair is trading at 1.0670. It's a very busy start to the week, with a host of manufacturing releases out of the eurozone and the US. German Manufacturing PMI improved to 58.3, while Eurozone Manufacturing PMI rose to 56.2 points. In the US, today's highlight is ISM Manufacturing PMI, which is expected to dip to 57.2 points. We'll also hear from two FOMC members – Esther Dudley and Patrick Harker.
Bounce from last Friday’s correction low at $1239 provided temporary relief as risk of retesting key near-term supports at $1236/33 (Fibo 38.2% of $1197/$1261 rally / daily cloud top) has eased. However, recovery attempts were so far capped at $1250 zone, where rising daily Tenkan-sen lies today, suggesting extended consolidation. Spot Gold may retest $1239 support, before bulls resume, with close above $1247 (Fibo 38.2% of $1261/$1239 pullback) required for stronger bullish signal.
Gold is getting stronger. The momentum seems back to bullish despite some consolidation. Strong resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low).
EUR/CHF's is heading lower. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). For now the support given at 1.0684 (06/03/20117 low) seems to be strong.
USD/CHF is strengthening. Hourly support is given at 0.9814 (27/03/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show further consolidating. In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.
EUR/USD is getting lower despite ongoing consolidation. The pair is heading lower since the pair failed to hold above former resistance given at 1.0874 (08/12/2017 high). Hourly support can be found at 1.0652 (31/03/2017 low). Stronger support can be found at 1.0493 (22/02/2017 low). The short-term technical structure indicates further weakness.
EUR/USD has seen a substantial retracement since March 27, after testing the significant resistance level at 1.0900. The price has been trading below the 10 SMA since then, indicating the upside selling pressure is still heavy. On the 4-hourly chart, the price has been holding above the 200 SMA since March 31, where there is stronger support.
The Sterling received a boost from upbeat fundamental data on Friday, which allowed it to outperform the American Dollar and retest the six-month down-trend. Technically, the GBP/USD currency pair should now bounce back from the trend-line, undergoing a bearish correction. The weekly pivot point represents immediate support at 1.2516, but is unlikely to limit the losses should those occur. At the same time, the second demand area, namely the cluster circa 1.2420, is also expected to remain out of reach today. The base case scenario is a close around 1.2490/80 zone.
As was anticipated, the USD/JPY currency pair was unable to reclaim the 112.00 mark, resulting in a 53-pip loss on Friday. Nevertheless, more bearish momentum is possible, but unlikely, since the pair rebounded after approaching the descending channel's support line last week. Currently, the Buck is making its way towards the channel's upper border, with the 112.00 handle being one of the main obstacles. However, technical indicators are unable to confirm the possibility of a positive outcome today, as they keep giving bearish signals. Another setback is possible, but the US Dollar is expected to hold above 110.00, therefore, refrain from retesting the lower trend-line any time soon.
During the early hours of Monday's trading session the common European currency scored slight gains against the US Dollar. However, the currency exchange rate was still positioned for further losses. The pair faced the resistance put up by the 55-day SMA, which was located at the 1.0674 level, and the monthly PP at 1.0685 mark. The fall of the currency pair might be hindered by the 23.60% Fibonacci retracement level, which is located at the 1.0639 level. The retracement level is also supported by the 100-day SMA at the 1.0624 level. However, a hindrance for long is unlikely.
On Monday morning the yellow metal attempted to break above the 1,250 mark, as it faced resistance put up by the weekly PP at 1,249.67 and the 50.00% Fibonacci retracement level, which is located at the 1,248.96 mark. If the bullion succeeds, it will likely jump to the 1,257.02 level, where the 200-day SMA is located at. However, in the case of a failure the commodity price has no support as low as the 1,238.33 level, where the weekly S1 is positioned. The weekly S1 is also supported by the freshly calculated monthly PP at the 1,234.74 level.
The Aussie stays in red on Monday and extends losses below 0.7600, coming ticks ahead of last week's low at 0.7585. Larger pullback from 0.7747 was so far contained here (support is formed by Fibo 61.8% of 0.7489/0.7747 rally), with limited recover (capped at 0.7677) and subsequent weakness threatening for firm break below 0.7585 pivot) bearish signal) for retest of another strong support at 0.7547 (200SMA).
GBPUSD is turning lower at the moment after very slow and overlapping recovery up to 78.6% fib. level which is seen as a three wave move; a correction that is pointing back to march 28 low. However, 1.2455 should be broken to confirm the next bearish wave.
Bullish sentiment that was regained on Thursday's break and closewell above weekly cloud top at 111.36 was offset by Friday's quick pullback after bulls briefly tested next pivot at 112.15 (Fibo 38.2% of 115.49/110.09 downleg), ending day firmly in red and closing at 111.36 level. The pair stands at the back foot on Monday as fresh near-term bears are probing below 111.36 handle (which also marks Fibo 38.2% of 110.09/112.18 upleg) and close below it would generate fresh bearish signal. Hourly studies in negative setup maintain downside pressure, as thick hourly cloud (111.44/74) so far caps recovery attempts. In addition, 4-hr studies are moving from neutral to bearish mode that also weighs on near-term action, as daily technicals maintain firm bearish mode. Sustained break below 111.36 handle would open next pivot at 110.90 (Fibo 61.8%) loss of which is needed to confirm reversal. Conversely, extended consolidation could be anticipated while the price holding around 111.36.
On the updated count of EURUSD we see price trading south following a completed a zig-zag correction, that was in progress since start of the year. Current reversal is strong and clearly impulsive, thus an important sign of a top in place, meaning a minimum three wave reversal to the downside may start to unfold but ideally that's a start of an impulsive drop in wave five of a higher degree. At the moment we see price trading in the first wave 1), probably in late stages, so let's be aware of corrections that may pop up during the process in the next few sessions as wave 2), that may later find resistance around the previous swing low at the 1.0760 level.
Cable is maintaining positive tone at the beginning of the week and holding firmly above psychological 1.2500 support (also daily Ichimoku cloud top, reinforced by rising Tenkan-sen line). The pair posted fresh marginally higher recovery high at 1.2553 on Monday, after Friday’s strong rally, with strong bullish sentiment being underpinned by the third consecutive bullish week.
The NZD/USD has been trading within the bearish channel, with a very low ATR. Slow zig-zag that has been forming this downtrend points out to new POC zone where price could reject and a breakout/continuation level just below it. The POC (EMA89, D H3, ATR pivot, Upper channel line) 0.7000-7015 could reject the price towards 0.6980. Breakout and 4h close below 0.6980 suggests 0.6960 as the next target. Break of 0.6960 could pull the price lower to 0.6930.
The EUR/USD pair maintained the sour tone on Friday, ending the week at 1.0656, its lowest since mid March. The release of worse-than-expected EU preliminary inflation for March weighed on the common currency, further reinforcing early week talks on the ECB being concerned about yields raise and that therefore, was not considering retrieving its massive stimulus program. Dollar's performance was uneven across the board, but ended it generally stronger, except against the Pound that managed to end the week with gains, in spite of softer final growth figures for the last quarter of 2016, as Fed's Dudley stated that the Central Bank could begin shrinking its balance sheet as soon as this year, should the economy perform in line with their expectations.
The Euro is consolidating above fresh two-week low at 1.0650, hit last Friday in extension of steep bear-leg from 1.0905 peak. Support at 1.0650 marks Fibo 61.8% of 1.0493/1.0905 rally, close below which would generate bearish signal for test of next strong support at 1.0622 (top of daily Ichimoku cloud/100SMA). Consolidation is so far holding under previous key support at 1.0700 (daily Kijun-sen/base of thick hourly cloud), which is expected to ideally cap upside attempts, before bears resume. Clear break below 1.0650/22 would triggers further bearish acceleration below 1.0600 trough which may attract key short-term support at 1.0500 zone. Strong near-term bears may be delayed on sustained break above 1.0700 barrier that would signal extended correction.
The GBP/USD broke above the resistance of the triangle (dotted orange) chart pattern, which makes it likely that a wave X (blue) has been completed. Price could be building a wave Y (blue) correction towards the Fibonacci targets.
Price is showing oversold conditions on the 4H and Daily chart, suggesting that a bounce could follow in the near-term. Nevertheless, the technical outlook for the currency pair is negative, and selling rallies the preferred strategy. Expect solid resistance at 1.0720 and 1.0750 (38.2 % Fibonacci of the March rally). Support is noted at 1.0650 (61.8 % Fibonacci and last week's low). Should the pair break below 1.06 support, a test of the March low at 1.05 should follow soon.
The EURUSD had a bearish momentum last week bottomed at 1.0651 after formed a 'shooting star' formation on daily chart following a false break above 1.0873 key resistance. The bias is bearish in nearest term testing 1.0600 region. Immediate resistance is seen around 1.0700. A clear break above that area could lead price to neutral zone in nearest term testing 1.0750 but price is still in a valid short-term bearish trend and as long as stay below 1.0750 any upside pullback should be seen as a good opportunity to sell. On the downside, a clear break and daily close below 1.0600 would expose 1.0500 region. Overall I remain neutral.
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