Sun, Apr 11, 2021 @ 09:41 GMT
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Technical Analysis

Forex Technical Analysis

EUR/USD Yesterday's peak at 1.0904 was followed by a minor reversal and the intraday bias is slightly negative, for a tight test of 1.0820 support area. The latter is still a base for another leg upwards, to 1.0940. Crucial on the downside is 1.0760 and only a violation of that low will signal a major reversal and a bearish bias for 1.0600.

USD/CHF Weakening, USD/CAD Holding Below 1.3400, AUD/USD Pushing Lower.

USD/CHF is declining. Hourly support is given at 0.9862 (31/01/2017 low) has been broken. Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show continued weakness.

EUR/USD Breaking Resistance Given At 1.0874, GBP/USD Edging Higher, USD/JPY Ready For Further Weakness.

EUR/USD keeps on pushing higher towards key resistance given at 1.0874 (08/12/2017 high) has been broken. Strong support can be found at 1.0493 (22/02/2017 low). Expected to show continued increase.

AUDUSD Is Holding In The Daily Cloud, Further Downside Seen After Consolidation

The Aussie remains under pressure and penetrated into thick daily cloud that offered temporary support in previous sessions. Yesterday's close below cloud top (0.7631) and daily Kijun-sen (0.7618) generated bearish signal, with the pair holding firmly in the cloud today and met next target at 0.7588 (Fibo 61.8% of 0.7489/0.7747 upleg).

Euro Retreats On Tuesday

On Tuesday morning the common European currency was in a retreat against the Greenback, as the currency exchange rate fluctuated near the 1.0850 mark. Previously, during Monday's trading the rate surged and touched the 1.0905 level, and with it a long term ascending channel's upper trend line was confirmed, as the pair bounce off of it. It is most likely that the currency pair will get squeezed in during today's trading session, as the 200-day SMA is moving in from the upside while the weekly R1 and the 38.20% Fibonacci retracement level are providing support, respectively, at 1.0841 and 1.0826 levels.

GBP/USD Takes Another Shot At Reclaiming 1.26

The Cable mostly behaved in accordance with expectations on Monday, with the only exception being that the pair was able to reach beyond the 1.26 major level. Nevertheless, trade closed with British currency appreciating 64 pips against the Buck, thus, reaching its four-week high. The bullish trend remains intact, with the Pound expected to outperform the US Dollar once more. Technical indicators are also giving bullish signals, confirming the possibility of the positive outcome today. However, due to lack of strong market movers, the upside development is likely to be very limited, with the immediate resistance cluster around 1.2630 preventing the Sterling from edging higher.

USD/JPY Attempts To Make Another U-Turn

Fortunately for the US Dollar, it managed to avoid substantial losses against the Japanese Yen yesterday. Nonetheless, a new four-month low was reached, but with the USD/JPY pair once again remaining above the 110.60 level, which appears to be providing strong psychological support. As a result, the Greenback has the opportunity to post gains today, as another leg down would cause a breach of this support. Moreover, the weekly S1 and the Bollinger band are somewhat bolstering the psychological demand area, even though technical studies are unable to confirm the possibility of a recovery.

Gold Trades Lower After Touching 1,260 Mark

During the early hours of Tuesday's trading session the yellow metal's price declined, as it traded just above the 1,250 mark. Previously, during Monday's trading session the bullion managed to surge and even reach above the 1,260 mark. During that move, the price passed the 200-day SMA, and it was expected that the metal will continue the surge. However, it seems that as the US political fundamental events calmed down, the buck regained its strength. Although, the hypothesis of a surge remains in force, as the medium term ascending channel remains unbroken.

USDJPY – Consolidation Above 110.00 To Precede Fresh Bears, Weekly Cloud Top Caps

The pair shows hesitation at psychological 110.00 support, reinforced by daily Kijun-sen line (yesterday's low was at 110.09), as subsequent bounce left long-tailed daily candle. Monday's close below weekly cloud top (111.36) is maintaining negative tone, as recovery attempts so far did not show stronger upside action. However, reversal of slow stochastic on daily chart suggests extended consolidation, which should be capped under weekly cloud top, before bears resume.

Cable – Bulls To Resume After Shallow Correction, 200SMA Eyed

Cable eased to 1.2550 zone in early European trading on Tuesday, after being flat in Asia, following Monday's spike to fresh multi-week high at 1.2613. Probe above strong barriers at 1.2568/ 80 (24 / 09 Feb highs) so far did not result in close above them to confirm break. Current easing could be seen as correction (signaled by reversal of slow stochastic from overbought zone) before broader bulls resume.

EURUSD Is Consolidating Under Cracked 200SMA, Further Upside Favored

The Euro is consolidating under Monday's fresh high at 1.0905 (the highest traded since 11 Nov 2016), posted on Monday. Bullish acceleration after Monday's gap-higher opening, cracked strong 200SMA barrier (1.0877), but failed to close above it, suggesting prolonged consolidation, before bulls resume.

EURUSD May Face Some Limited Upside

On the updated count of EURUSD we see price trading in a possible zig-zag correction of a higher degree, with waves A and B already completed. Current bullish rally is wave C then, that can be in final stages if we consider that there is possible to count five subwaves up from 1.0495 swing low. So from an Elliott Wave perspective market may turn south with three waves minimum back to the area of a former wave four, at 1.0760. A sharp impulsive decline beneath that price would indicate that top is in place, so until that happens we need to keep in mind possible extensions up to 1.1000 area.

USDJPY Elliott Wave View: Extension lower

We are taking the more aggressive view in USDJPY and calling the rally to 115.48 on 3/10 as Intermediate wave (B). Decline from there is unfolding as a 5 waves impulse Elliott wave structure with an extension in wave 3. Down from 115.5, Minor wave 1 ended at 114.46 and Minor wave 2 ended at 115.2. Minor wave 3 is extended and further subdivided into 5 impulse waves where Minute wave ((i)) ended at 112.88, Minute wave ((ii)) ended at 113.56 and Minute wave ((iii)) ended at 110.59, Minute wave ((iv)) ended at 111.34, and Minute wave ((v)) of 3 is proposed complete at 110.077. Minor wave 4 bounce is currently in progress towards 111.27 – 112.02 area, which is 23.6 – 38.2 retracement of Minor wave 3, before further downside is seen to complete Minor wave 5 towards as low as 106.85 – 108.5 area. Bounce is expected to be limited and shallow.

Foreign Exchange Market Commentary

The unwind of the 'Trump trade' gathered momentum this Monday, resulting in the EUR/USD pair rallying to a fresh yearly high of 1.0905 at the beginning of the US session. Risk aversion dominated the Asian and European sessions, after the US GOP decided to pull out the healthcare bill set to overhaul the Obamacare late Friday. Speculative interest is now wondering if the US new administration will be able to push forward its pro-growth agenda, promised during the campaign.

EUR/USD, GBP/USD Build Wave-3 Momentum And Wave-4 Retracement

The EUR/USD indeed continued with the uptrend yesterday by breaking slightly above 1.09. Price has bounced at the 61.8% Fibonacci target of wave C (green) could extend towards the 100% Fibonacci target near the psychological round level of 1.10.

Daily Technical Outlook And Review

The EUR started the week off on a strong footing, gapping around 50 pips north at the open which remains unfilled at this point. Strong buying, as you can see, took place throughout Asia and London. It was only once price crossed swords with the 1.09 handle going into the US session did we see the bears make an appearance, which has so far erased 50% of the day's gains. Alongside the 1.09 handle, the 2016 yearly opening level at 1.0873 and the daily resistance level coming in at 1.0850 have both been brought into play.

Is USD/JPY Poised for a Further Breakdown?

Market jitters since Friday, when the Trump Administration's failure to repeal/replace Obamacare became apparent, initially jolted equity markets, the US dollar, and gold when the new trading week opened on Monday. Although these market moves were significantly pared throughout the day, the signal was clear that confidence in President Trump's ability to achieve his broader economic agenda had diminished even further. This waning confidence brought into question the previously high expectations that Trump would bring about accelerated economic growth and corresponding rises in inflation and interest rates.

AUD/NZD Approaching Key Support

After big overnight falls, the US dollar managed to bounce back a little shortly after the New York open, the Dow was well over 100 points off its earlier lows and the VIX had declined more than 10% from its earlier highs. It wasn't exactly risk-on, but the situation certainly looked a lot calmer than at the European open. The S&P 500 had completely eradicated the gap it had left behind after the closing bell on Friday at 2344.

Crude Oil on Shaky Ground as OPEC-led Deal Remains at Risk

US crude oil, as represented by the West Texas Intermediate benchmark, fell on Monday to retest the key $47-area support level. This major technical support marks the year-to-date lows, which have already been tested twice within the past two weeks. Pressure on oil prices during the month of March has been exacerbated primarily by two key factors - 1) concerns that US production is quickly expanding and 2) questions as to whether the current OPEC-led deal to cut production will be extended beyond its current end date in June.

Elliott Wave Analysis: USDCHF Trading Lower; 0.9682 Region Is In View

USDCHF is trading in a correction of a higher degree, a big EW triangle pattern, with price now specifically trading in final stages of this triangle correction in wave C) of E. That said more weakness is expected to follow from current levels, ideally down towards the 161.8 Fibonacci projection zone.

GBP/USD Bulls Test 1.2600 Ahead of Brexit Triggering

This morning GBP/USD reached 1.2597, the highest the pair has attained since February 2, helped by the slump of USD caused by Trump's healthcare bill failure. GBP/USD has been trading above the downside uptrend line support since mid-March. The significant psychological resistance level at 1.2500 was broken today during early Asian session.

Dow Fell Further after Holding in Directionless Mode

Dow fell further on Monday after holding in directionless mode during past three days and hit fresh nearly six-weeks low at 20386, where rising 55SMA offered temporary to renewed bears. Extended wave C, on which the price is currently riding, hit levels below its FE 161.8% (20400), seeing scope for further extension towards next Fibonacci expansion levels at 20344 (176.4%), possibly towards double Fibo support at 20260 zone (FE200% / Fibo 61.8% of 19713/21160 rally).

Dollar Unlikely to Go Down Without a Fight

Financial markets opened in a bit of a panic mode overnight in the wake of Trump's failure to repeal Obamacare. Stock index futures slumped while the dollar index fell to its lowest since mid-November as the yen and euro both gapped higher. The dollar's losses steepened after the London open as the GBP/USD climbed to near 1.26 handle and EUR/USD neared 1.0900. European stock indices bounced off their lows slightly.

EUR/JPY 4h Trend Line Broken For Further Drop

The EUR/JPY has broken a 4h trend line and currently it is supported by W L3 pivot. If the prices retraces to POC zone (EMA 89, W H3, 50.0, inner trend line, ATR high) 120.60-85 we might see a rejection towards 119.90 and 119.25. If there is no retracement to the upside, than traders should pay attention to 4h close below 119.20 for further continuation down to 118.75.

Daily Technical Analysis

The EURUSD continued its bullish momentum last week topped at 1.0824 and hit 1.0849 earlier today in Asian session. Price is still in a bullish phase, moving convincingly above the H1 EMA 200 and a trend line support as you can see on my H1 chart below. The bias is bullish in nearest term testing 1.0870 key resistance which is a good place to sell with a tight stop loss. Immediate support is seen around 1.0795. A clear break below that area could lead price to neutral zone in nearest term testing 1.0750 area where H1 EMA 200 and the trend line support converge which is a good place to buy with a tight stop loss as a clear break below that area (especially if that happen after a rejection above 1.0870 ) would be a serious threat to the current short term bullish bias. On the upside, a clear break and daily close above 1.0870 could quickly target 1.1000 this week.

GOLD – Fresh Rally Approaches 200SMA

Spot Gold approached 200SMA barrier ($1259) on Monday's strong acceleration, driven by fresh weakness of the dollar and rising political uncertainty in the US. Fresh rally ended congestion of past three days that was generating negative signals on candlesticks and overbought slow stochastic. Targets at $1259 and $1263 (27 Feb high) are in near-term focus and break higher could drive Gold price towards $1278 (Fibo 61.8% of $1375/$1122 descend).

FTSE Dipped Below 55SMA On Stronger Pound

FTSE fell to two-month low at 7179, following lower opening on Monday and subsequent bearish acceleration. Significantly stronger pound keeps the index under increased pressure that resulted in break below 55SMA which held bears in past three days.

GOLD Back To 1-Month High, SILVER Increasing Demand, Crude Oil Heading Downwards

Gold has risen sharply invalidating the bearish outlook. The momentum seems back to bullish. Strong resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low). Expected to show further strengthening.

EUR/CHF Moving Sideways, EUR/JPY Continued Bearish Pressures, EUR/GBP Riding Downtrend Channel.

EUR/CHF's is moving up and down. 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). In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

USD/CHF Renewed Selling Pressures, USD/CAD Holding Below 1.3400, AUD/USD Moving Sideways.

USD/CHF is declining. Hourly support is given at 0.9862 (31/01/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show continued weakness. 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.