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NZDUSD has finally managed to break below the rectangle that has been dictating the price action since February 2023, as NZD bears continue to recover part of the losses they have been suffering by the rally that commenced on October 13, 2022. However, the downside breakout has not been impressive as NZD bulls appear determined to halt this correction.

Having said that NZD bears probably feel in control of the market. The Average Directional Movement Index (ADX) is edging higher, signaling a strong bearish trend, and the RSI is hovering well below its 50-midpoint. More interestingly, the stochastic oscillator remains stuck at the lower end of its oversold territory. Although it can hover in this area for a while, its most recent moves are also a sign that the bearish pressure could soon abate.

If the NZD bears try to further capitalize on the bearish breakout, they would target the 0.5920 level set by the May 15, 2022 low. The 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.5870 could prove tougher to crack than anticipated. However, if broken, it could open the door for a more sustainable move towards the October 13, 2022 low of 0.5511.

Should the NZD bulls decide to negate the current bearish move, they would have to recapture the 0.6060-0.6092 range populated by the 38.2% Fibonacci retracement and the July 14, 2022 low respectively. A return of the NZDUSD pair back inside the recent rectangle would be a short-term victory for the NZD bulls and quite important for market sentiment.

To sum up, the bearish breakout is significant, but NZD bears have to push for a stronger correction to avoid calls of a false breakout.

AUDUSD bounced back above the nearby 0.6483 base, which has been buffering selling forces since the start of May, after a flash spike to a new six-month low of 0.6457 on Wednesday.

The rebound in the stochastic oscillator promotes an upside breakout or some stabilization, though stronger bullish signals are required to boost market sentiment. Moreover, the RSI is comfortably below its 50 neutral mark and the MACD remains negatively charged below its red signal line, both suggesting sellers have not abandoned their efforts yet. The negative slope in the simple moving averages (SMA) is another discouraging sign.

A decisive extension above the 0.6525-0.6565 zone and into the former range area could prompt an increase towards the 50% Fibonacci retracement of the 0.6169-0.7157 upleg at 0.6663. The 200-day SMA and the tentative resistance trendline at 0.6720 could be more important obstacles, a break of which may lift the price directly up to the 38.2% Fibonacci and the topside of the range at 0.6800.

Should the bears successfully breach the 0.6485 bar, they may forcefully squeeze the price towards the tentative ascending trendline drawn from the 2020 low at 0.6360. Another failure here could add more fuel to the sell-off, shifting the spotlight straight to the broken support line from August 2021 and the 0.6270-0.6255 constraining region.

In short, negative risks have not evaporated in the AUDUSD market, although a pause in the current bearish wave is likely. A clear close below 0.6483 may generate a more aggressive decline.

The Euro remains at the back foot in early Thursday despite Wednesday’s strong downside rejection and signal of bear-trap formation on daily chart, as well as constructive signals from daily chart (fading bearish momentum/north-heading stochastic / RSI approaching oversold territory).

The action stays below broken psychological level at 1.07 for the second day that adds to negative near-term outlook for renewed attempt through cracked Fibo support at 1.0652 (76.4% of 1.0516/1.1095), clear break of which is needed to signal bearish continuation.

At the upside, 1.07 offers immediate resistance, followed by strong barriers at 1.0737/43 double-Fibo resistance zone (broken 61.8% of 1.0516/1.1095 / 23.6% of 1.1095/1.0635 / falling 10DMA) which should cap extended upticks to keep near-term bias with bears.

Markets await release of the Eurozone inflation report for May, with prevailing optimistic mood after inflation in Germany dropped to the lowest in more than a year.

EU’s harmonized core CPI is expected to dip to 7.2% in May from 7.3% in April, which would add to signals that bloc’s underlying inflation is eventually starting to ease and lower bets for stronger rate hikes by the ECB.

Res: 1.0700; 1.0744; 1.0759; 1.0805.
Sup: 1.0652; 1.0631; 1.0600; 1.0551.

Daily Pivots: (S1) 0.8567; (P) 0.8608; (R1) 0.8633; More...

Intraday bias in EUR/GBP remains on the downside at this point. With 100% projection of 0.8977 to 0.8717 from 0.8874 at 0.8614 broken, next target is 0.8545 support and then. 161.8% projection at 0.8453. On the upside, break of 0.8717 resistance is needed to confirm short term bottoming. Otherwise, outlook will stay bearish even in case of recovery.

In the bigger picture, current development argues that whole decline from 0.9267 (2022 high) is still in progress. This is part of the long term range pattern from 0.9499 (2020 high). Deeper fall would be seen through 0.8545 support. This will now remain the favored case as long as 0.8874 resistance holds.

Daily Pivots: (S1) 1.6393; (P) 1.6454; (R1) 1.6496; More...

Intraday bias in EUR/AUD remains neutral for the moment, and further rise is in favor. Break of 1.6514 will resume the rebound from 1.6134 to retest 1.6785 high. On the downside, however, firm break of 1.6356 minor support will turn bias back to the downside for 1.6134 support and below, to resume the fall from 1.6785.

In the bigger picture, whole down trend from 1.9799 (2020 high) should have completed at 1.4281 (2022 low). Further rise should be seen to 61.8% retracement of 1.9799 to 1.4281 at 1.7691 next. For now, outlook will stay bullish as long as 1.5976 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 148.31; (P) 149.23; (R1) 149.87; More....

Intraday in EUR/JPY is mildly on the downside, as correctively pattern from 151.60 is probably in the third leg. Deeper fall would be seen to 146.12 support, and possibly below. On the upside, however, above 151.05 will target 151.60 high. Firm break there will resume larger up trend to 153.64 projection level.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 61.8% projection of 124.37 to 148.38 from 138.81 at 153.64. Sustained break there will pave the way to 100% projection at 162.82. For now, medium term outlook will remain bullish as long as 139.05 support holds, even in case of deep pull back.

Daily Pivots: (S1) 172.70; (P) 173.20; (R1) 173.88; More...

GBP/JPY is staying in consolidation from 174.25 and intraday bias remains neutral. Further rally is expected as long as 171.26 support holds. Break of 174.25 will resume larger up trend to 100% projection of 148.93 to 172.11 from 155.33 at 178.51. Nevertheless, break of 171.26 minor support will delay the bullish case, and turn bias to the downside for deeper retreat.

In the bigger picture, up trend from 123.94 (2020 low) is extending. Next target will be 161.8% projection of 122.75 (2016 low) to 156.59 (2018 high) from 123.94 at 178.69. For now, medium term outlook will remain bullish as long as 155.33 support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.9712; (P) 0.9732; (R1) 0.9754; More...

Range trading continues in EUR/CHF and intraday bias remains neutral. Strong support is still expected around 61.8% retracement of 0.9407 to 1.0095 at 0.9670 to complete the whole corrective pattern from 1.0095. On the upside, firm break of 0.9760 resistance will confirm short term bottoming, and turn bias back to the upside for 0.9878 resistance next. However, sustained break of 0.9670 will pave the way back to 0.9407 low instead.

In the bigger picture, prior rejection by 38.2% retracement of 1.1149 to 0.9407 at 1.0072 suggests that medium term outlook is staying bearish. The pair is also capped below 55 W EMA (now at 0.9945). Down trend from 1.2004 (2018 high) is not completed yet and is in favor to resume through 0.9407 at a later stage. However, decisive break of 1.0095 resistance will raise the chance of bullish trend reversal. Rise from 0.9407 should then target 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484).

Daily Pivots: (S1) 1.0637; (P) 1.0687; (R1) 1.1.0739; More...

Intraday bias in EUR/USD stays on the downside at this point. Current fall is seen as corrective the whole up trend from 0.9534. Deeper fall should be seen to 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, break of 1.0745 resistance will indicate short term bottoming. Stronger rebound would be seen back to 55 D EMA (now at 1.0836).

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 1.2378; (P) 1.2411; (R1) 1.2474; More...

Intraday bias in GBP/USD stays neutral at this point and further decline is expected with 1.2468 minor resistance intact. On the downside, break of 1.2306 will resume the fall from 1.2678, as correcting whole up trend from 1.0351, to 1.1801 cluster support (38.2% retracement of 1.0351 to 1.2678 at 1.1789). On the upside, however, firm break of 1.2468 will turn bias back to the upside for stronger rebound.

In the bigger picture, as long as 1.1801 support holds, rise from 1.0351 medium term bottom (2022 low) is expected to extend further. Sustained break of 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759 will add to the case of long term bullish trend reversal. However, firm break of 1.1801 will indicate rejection by 1.2759, and bring deeper decline, even as a correction.