The EUR/USD retraced from its highs on Friday and currently it is retracing towards the POC zone. The POC (D L4, W L3, EMA89, ATR Pivot, Bullish order block, 61.8) is 1.1970-1.1985 and we could see a bounce. Historical buyers should align with now moment buyers within the zone and the target is 1.2046-1.2068. Only a breakout and/or 4h close above 1.2070 should rally the price towards 1.2103 and 1.2157. Bears could gain the upper hand below 1.1945 and if the price gets below the target is 1.1910.
As it was expected, the new trading week the Greenback started in a recovery against the Yen. A breakout near the 107.40 mark suggests that the pair is moving in a new junior descending channel. If this assumption is correct, the buck is expected to try to surge towards the monthly PP at 109.76. Yet this target might not be reached from the first attempt, as road to the north is obstructed by a combined resistance level that consists of the weekly PP, the monthly S1 as well as the 55- and 100-hour SMAs. From a daily perspective, this barrier also seems too strong to be crossed. In other words, a new descending channel on a larger timeframe points out that the fourth rebound is expected to follow.
Due to positive numbers that were revealed during a release on the UK Manufacturing Production, the Pound caught an upside momentum that helped it to reach the monthly R1 at 1.1320. However, this barrier appeared to be strong enough to prevent the further surge. Given that the southern direction is secured by the 55-hour SMA and the updated weekly PP at 1.3110 as well as the approaching 100- and 200-hour SMAs, an extensive drop is not expected to follow. In contrast, these indicators will motivate the pair to try break to the top. Except for the above monthly R1 the next closest resistance barrier is located only at 1.3310. Yet, these projections can be altered, as the Sterling is expected to be quite heavily affected by a number of data releases this week.
On Friday, the currency exchange rate acted in accordance with one of the scenarios, which suggested that as soon as markets will calm down the buck is going to try restoring some lost positions. Indeed, after failing to jump above the monthly R1 at 1.2099 the pair switched a direction and ended the week near the combined support level set up by the 55-hour SMA and the updated weekly PP at 1.1999. It seems that the turnaround was partially attributed to clash with the upper boundary of a medium-term rising wedge, which can be clearly seen on a daily timeframe. From this larger perspective the rate is expected to continue to gradually slip to the bottom. However, in the short run these attempts most likely will be neutralized by the 100- and 200-hour SMAs.
The dollar's weakness and a surge in safe havens were the central themes in the markets last week. The dollar index fell 1.4% in the past five trading days, taking the overall losses to 10.8% for the year so far. With market expectations of a U.S. rate hike in December falling below 40%, according to CME's FedWatch, it appears that investors believe the tightening course for 2017 is over. Even Bond markets are showing more pessimism, with U.S. 10-year treasury yields dropping to 2.02% on Friday; the lowest since Trump's election.
The euro has pulled back towards the key 1.2000 level against the U.S dollar, as the greenback opens the week on stronger footing. Price-action has so far moved to test the calculated weekly pivot point, located at the 1.1999 level.
The USDJPY pair is gaining strength as the new trading week begins, with price-action moving towards key resistance, at 108.56, marking a one-hundred and twenty-five pips rebound from the fourteen-month trading low, set last week, at 107.31.
EURUSD maintains its underlying bull trend. The pair has been rising steadily in an ascending channel since April and peaked at 1.2091 on Friday. This was the highest level since December 2014. The key 1.2100 level will likely be a challenge to break. Prices retreated just ahead of this resistance as upside momentum faded and EURUSD subsequently pulled back. Based on the momentum oscillators, it can be seen that the market’s upward trajectory has slowed over the past couple of weeks.
USDJPY (108.41): The USDJPY continued to slide as the price fell to session lows of 107.31. Further declines could be expected as the currency pair broke past the support level of 108.64 - 108.26. A minor pullback to this recently breached support level could establish resistance. A reversal off this level will set USDJPY on track to post further losses. In the unlikely event of a breakout above the support level, the bias could be shifting to the upside with 111.00 level of resistance coming into focus.
GBPUSD (1.3180): The British pound continued on Friday with strong gains to test the 1.32 handle. The currency gained strength despite the economic data over the week suggesting weakness, especially in the construction and services sector. The week ahead will be intense for the British pound as the inflation, jobs and the BoE meeting will see traders turning cautious on the British pound. Near-term momentum could keep the GBPUSD biased to the upside for a test towards the previously established resistance level of 1.3236. However, a pullback is likely as the support level at 1.2980 - 1.2961 remains in focus.
EURUSD (1.2014): The EURUSD posted strong gains last week with the rally being driven partly by the ECB's decision on Thursday and a weaker US dollar. By Friday's close price action was seen pulling back from the 1.20 handle marking a retest of this level for the second time. On the 4-hour chart, we notice that the pullback in the EURUSD will see a retest of the minor support that will be formed at 1.1962. This support could mark the cup and handle pattern that is still evolving. A reversal off 1.1962 will push EURUSD towards 1.2200. Alternately, if the support level at 1.1962 fails, the common currency could slip to the next downside target of 1.1882 which is another strong technical level of interest in the currency pair.
Price changed little in the early morning, has opened with a gap down and seems too overbought to resume the upside movement. Is trading in the red right now and could hit new lows in the upcoming days if the USDX will really start another leg higher after the massive drop.
AUD/USD is trading in the red and signals an overbought after the impressive rally. The Friday’s spike shows that the bulls could lose significant ground in the upcoming days. We had a false breakout above the 0.8065 and above the median line (ml) of the minor ascending pitchfork, so it could drop at least till will reach and retest the lower median line (lml) of the ascending pitchfork.
The USD/JPY plunged in the last two days, but now has opened with an immense gap up, signaling that the bulls are still in the game. Is trading in the green right now, but remains to see if the buyers will be strong enough to push it towards new highs, or this it was only a temporary rebound.
EURUSD - With the pair seen closing higher on Tuesday, more recovery is envisaged. Resistance comes in at 1.2100 level with a cut through here opening the door for more upside towards the 1.2150 level. Further up, resistance lies at the 1.2200 level where a break will expose the 1.2250 level. Its daily RSI is bullish and pointing higher suggesting further upside pressure. Conversely, support lies at the 1.2000 level where a violation will aim at the 1.1950 level. A break of here will aim at the 1.1900 level. Below here will open the door for more weakness towards the 1.1850. All in all, EURUSD faces further upside towards its key resistance.
As the dollar sold off again, the EUR/USD managed to climb to a new 2017 high of around 1.2090 this morning before pulling back as traders booked profit ahead of the weekend. From a technical perspective, there may be a possibility we have seen a near-term top, although at this stage this is just a potential scenario. At around 1.20-1.21, we already know that the EUR/USD is testing key long-term levels, and the ECB is evidently becoming worried about the high exchange rate even if it hasn't said so explicitly.
The USDCAD pair is consolidating above fresh low at 1.2061 posted earlier today (the lowest since mid-May 2015) after six straight days in red. The pair traded in a choppy mode around 1.2100 handle after release of Canada's jobs data for August. Unemployment dropped to 6.2% in August, hitting 9-year low, vs 6.3% forecast as economy added more jobs than expected. Employment change showed 22.2K new jobs created in August, against forecasted increase by 19K and well above 10.9K seen last month.
Price dropped further today and extended the impressive sell-off, but has found temporary support at the 1.2061 level. USD/CAD has started to increase in the last hours, but this rebound could be only temporary because it could drop further if the Canadian data will come in better than expected. The minor throwback is natural after the immense drop, it seems too oversold to resume the bearish momentum, but the fundamental factors will lead the rate again in the upcoming hours
Cable broke above 1.3200 barrier in extended bullish acceleration, returning to the levels last visited in early August. The pair is driven by strong bullish sentiment, with thick daily cloud, above which the price emerged yesterday, underpinning the action. Extended wave C from 1.2852 met target at 1.3224 (FE 176.4%) and showing scope for final push towards key barriers at 1.3268 (03 Aug peak) and 1.3273 (Fee 200%).
The British pound has moved sharply higher against the U.S dollar during the European trading session, reaching 1.3190, after the UK economy posted much better than expected UK industrial output and manufacturing data. This week's continuation of the recent fall in the value of the U.S dollars trade-weighted index, which is now at its lowest level since January 2015, is also pushing the GBPUSD pair higher.
The U.S dollar continues to slide sharply lower against the Japanese Yen, with the USDJPY pair so far finding intraday support from the 107.40 level, trading at its lowest level since November 15th, 2016. Broad-based weakness in the U.S index is accelerating, after yesterday's weaker than expected U.S initial jobs claims, which increase by 62,000, marking the highest level for initial claims since April 18, 2015.
AUD/USD has successfully tested the rising trendline support at 0.7881 and has broken the hourly resistance at 0.8066, improving the shortterm technical structure. Hourly support can be found at 0.8045 (intraday high). Key resistance is given at 0.8164 (14/05/2015 high). Expected to further consolidate.
USD/CAD is moving lower, confirming an underlying declining trend. Hourly support is located at 1.1945 (29/04/2015 low). Resistance is now given at a distance at 1.2778 (15/08/2017 low). Expected to show continued short-term bearish pressures if resistance at 1.2778 holds.
USD/JPY moving lower confirming persistent selling pressure. The pair has failed to test resistance at 111.05 (04/08/2017 high). Support is located at 106.95 (10/11/2017 high). Expected to show further downside pressures.
GBP/USD has pushed above rising trend-line resistance, confirming an improving short-term technical structure. Strong support is given at 1.3023 (06/09/2017 low). Expected to show shortterm bullish pressures.
EURUSD has broken the resistance implied by its horizontal resistance, confirming an improving technical structure. Hourly resistance can be found at 1.2090 (intraday high) while hourly support lies at 1.2023 (intraday low). Stronger support is given at a distance at 1.1662 (17/08/2017 low). Expected to show renewed bullish pressures.
The Aussie dollar was among the top gainers in Asia, driven by weaker US dollar and data from China and Australia, released overnight. Australian Home loans unexpectedly jumped in July by 2.9%, beating forecast at 1.0% and upward-revised June numbers at 1.2%.
Cable extends steep ascend into fourth straight day and met target at 1.3150 zone (double Fibonacci barrier consisting of Fibo 76.4% of 1.3268/1.2773 descend and FE 138.2% of the wave C from 1.2852 trough).
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.