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EURUSD

The EURUSD had a strong bullish momentum last week topped at 1.1445. As you can see on my H4 chart below, price has been moving convincingly above the EMA 200 and the trend line support suggests a valid and strong bullish trend. The bias remains bullish in nearest term testing 1.1500 – 1.1530 region before targeting 1.1615 key resistance. Immediate support is seen around 1.1350. A clear break below that area could lead price to neutral zone in nearest term testing 1.1285 but overall I remain bullish and any downside pullback should be seen as a good opportunity to buy.

GBPUSD

The GBPUSD had a strong bullish momentum last week topped at 1.3029. The bias remains bullish in nearest term testing 1.3050 key resistance which remains a good place to sell with a tight stop loss as a clear break and daily close above that area would activate my bullish mode targeting 1.3350 – 1.3500 region. Immediate support is seen around 1.2950 area. A clear break below that area could lead price to neutral zone in nearest term testing 1.2900 region.

USDJPY

The USDJPY had a bullish momentum last week topped at 112.92. As you can see on my H4 chart below, price has been moving consistently above the EMA 200 after broke above the trend line resistance, suggests a valid bullish trend. The bias is neutral in nearest term probably with a little bullish bias testing 113.00 area. A clear break and daily close above that area would expose 114.30 region. Immediate support is seen around 111.75. A clear break below that area could trigger further bearish pullback testing 111.30/00 region but as long as stay above 110.65 price is still in a bullish phase.

USDCHF

The USDCHF had a bearish momentum last week bottomed at 0.9550. The bias remains bearish in nearest term but note that from a daily chart perspective, 0.9550 – 0.9450 area remains a key support and good place to buy with a tight stop loss below 0.9450. Immediate resistance is seen around 0.9650/75. A clear break above that area could lead price to neutral zone in nearest term testing 0.9765 region. On the downside, a clear break below 0.9450 would expose 0.9250 area this week.

I hope your weekend was a productive one, even if it was just time away from your charts. We all need to recharge the batteries from time to time and the fact that markets aren't open on the weekend can sometimes be a bit of a blessing in disguise for the trading addict within us.

But it's back into the full swing of things again today, as focus turns back to the majors with a look at GBP/USD. If you've been following the blog, you'll have levels drawn showing price stuck within a 1500 pip GBP/USD range that formed after the Brexit low was broken and retested as resistance.

We had been trading this support/resistance level in the middle of the range from the long side, but price has now come back to retest previous swing high resistance:

GBP/USD Daily:

As you can see on the daily chart above, it's just a simple previous high that price has come back up to. There's nothing more to this level and there's nothing special about it while in the middle of that overall range.

With the bullish momentum behind that little push and the level having no significance other than a previous swing high, the level isn't as strong as it could be. However, if you do like the level and the risk reward that trading around it offers, step into an intraday chart like the hourly:

GBP/USD Hourly:

EURGBP - The cross closed lower the past week after rejecting higher prices. This development now leaves risk lower as we enter a new week. Support lies at the 0.8700 level where a violation will turn focus to the 0.8650 level. A break will expose the 0.8600 level. Resistance resides at the 0.8800 level where a violation if seen will turn risk towards the 0.8850 level. Further up, resistance resides at 0.8900 level followed by the 0.8950 level. All in all, EURGBP remains biased to the downside on price rejection.

EURUSD - The pair closed higher on a rally the past week leaving risk of price extension on the cards. Resistance comes in at 1.1500 level with a cut through here opening the door for more upside towards the 1.1550 level. Further up, resistance lies at the 1.1600 level where a break will expose the 1.1650 level. Its weekly RSI is bullish and pointing higher suggesting further strength. Conversely, support lies at the 1.1400 level where a violation will aim at the 1.1350 level. A break of here will aim at the 1.1300 level. All in all, EURUSD faces further upside pressure.

GOLD - The commodity continues to face downside pressure leaving risk to the downside. On the downside, support comes in at the 1,230.00 level where a break will turn attention to the 1,220.00 level. Further down, a cut through here will open the door for a move lower towards the 1,210.00 level. Below here if seen could trigger further downside pressure targeting the 1,200.00 level. Conversely, resistance resides at the 1,250.00 level where a break will aim at the 1,260.00 level. A turn above there will expose the 1,270.00 level. Further out, resistance stands at the 1,280.00 level. All in all, GOLD looks to weaken further.

Could be an exciting week as the market deals in the afterglow of a recognised global shift by central banks to withdraw emergency accommodation. But so far in the early trade market is tending to a bit of a hangover at the beginning of Asia after a pivotal week for G10 currencies.

Hawkishness is very contagious and while there may be a lull in price action due to the US holiday-shortened week and of course Presidents Trumps first G-20 around the corner. I expect the central bank theme to remain the primary focus as the markets start to gauge the intensity of this apparent policy shift as well as what other global central banks will join the party.

Top side fervour on the on the EUR and CAD has a abated as dealers turn cautious waiting to see if the central bank hawkish push continues or is challenged by incoming data.

Looking between the lines, for the Feds at least, it appears there's a gradual transition afoot beyond data dependence to a greater concern about the adverse financial market impact from elevated asset prices.

Australian Dollar

With the RBA on tap, everyone is focused on hawkish prospects for Tuesday's RBA meeting. There's been a subtle bid in the Australian Dollar since the Bank of Canada hawkish surprise.But demand accelerated last Wednesday when the street started to price in concerted efforts by Global Central Banks to withdraw accommodations The seduction to catch a policy shift is far too high and predictable given the string of recent hawkish surprises But in reality, it's difficult to see where this hawkish RBA shift is justified. Traders could be in for a reality check if the RBA sits neutral and would likely dent the official coordination narrative that the markets have been building on.

Japanese Yen

Japan Prime Minister Abe's Liberal Democratic Party suffered an epic defeat in an election in Tokyo this weekend. Obviously, the market has bigger fish to fry as USDJPY remains very resilient trading slightly lower than Friday NY close.

Euro

The Euro is taking a breather in early APAC trade. But we ended the week on a cautious note as some thought the ECB might want to soften the rhetoric after the market's initial reaction to the Draghi Taper announcement. Perhaps traders are putting more credibility behind that mysterious ECB source that reminded the market it ‘overreacted' to a misunderstood Draghi,

EUR/USD's rally resumed last week and powered through 1.1298 resistance to as high as 1.1444. With a temporary top in place, initial bias is neutral this week for consolidation. But downside of retreat should be contained by 1.1291 support to bring another rise. Break of 1.1444 will extend the rally from 1.0339 low to 1.1615 resistance next.

In the bigger picture, the firm break of 1.1298 resistance further affirm medium term reversal. That is an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Further rise would be seen to 55 month EMA (now at 1.1776). Sustained break there will pave the way to 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 next. This will now remain the favored case as long as 1.1118 support holds.

In the long term picture, 1.0339 is now seen as an important bottom as the down trend from 1.6039 (2008 high) could have completed. It's still early to decide whether price action form 1.0339 is developing into a corrective or impulsive move. But in either case, further rally would be seen to 38.2% retracement of 1.6039 to 1.0339 at 1.2516

USD/JPY rose further to as high as 112.91 last week but failed to break through medium term channel resistance and retreated. With a temporary top formed, initial bias is neutral this week first. Near term outlook stays cautiously bullish as long as 110.94 support holds. Sustained break of the medium term channel resistance will argue that whole pull back from 118.65 has completed at 108.12 already. In such case, further rise should be seen to 114.36 resistance for confirmation. However, break of 110.94 will argue that rebound from 108.81 has completed and will turn bias back to the downside for this support instead.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. Meanwhile,

In the long term picture, the rise from 75.56 long term bottom to 125.85 top is viewed as an impulsive move. Price actions from 125.85 are seen as a corrective move which could still extend. But, up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

GBP/USD's strong rally last week indicates that pull back from 1.3047 has completed at 1.2588 already. And the larger correction from 1.1946 is still in progress. With a temporary top formed at 1.3029, initial bias is neutral this week first. In case of another fall, downside should be contained by 1.2849 support to bring rise resumption. Break of 1.3029 will send GBP/USD through 1.3047 to 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168 next.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is now in favor, overall outlook remains bearish as long as 1.3444 key resistance holds. Larger down trend from 1.7190 is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. On resumption, such decline would extend deeper to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532. However, firm break of 1.3444 should confirm reversal and turn outlook bullish.

USD/CHF's down trend from 1.0342 resumed last week and reached as low as 0.9552. A temporary low is in place and initial bias is neutral this week for some consolidation first. Upside of recovery should be limited below 0.9770 resistance and bring another decline. Below 0.9551 will target 0.9443 key support level. At this point, we'd expect strong support from there to bring rebound.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.