Evident bullish recovery emerged from the area around 1.4550, where a significant bullish engulfing weekly candlestick was expressed.
Shortly after, persistence above the levels of 1.5000-1.5080 exposed the weekly supply zone of 1.5500-1.5550 (roughly corresponding to weekly 50% Fibonacci level), where a significant bearish pressure was previously applied on February 22.
The market has been already pushed above the weekly supply at 1.5530 (50% Fibo level) and slightly above 1.5720 (FE 100%), until the evident bearish pressure was applied around 1.5800 resulting in the recent two bearish engulfing weekly candlesticks.
Note that persistence below the weekly supply at 1.5530 (corresponding to 50% Fibo level) hinders the ongoing bullish swing. It gives more time for sideways movement with a strong bearish tendency.
Sideways movement with a slight bearish tendency had been expressed on the daily chart until a bullish breakout took place above 1.4970-1.5000 (through a long-term bullish reversal pattern).
The zone between 1.5000 and 1.5100 failed to keep prices below. Moreover, it formed a prominent demand zone for the GBP/USD pair while trending within the depicted bullish channel.
A bearish breakout off the depicted bullish channel took place as a result of the bearish pressure at 1.5660 (lower high).
Initial bearish targets would be located at 1.5250 and at 1.5100 (depicted demand level) where a short-term buy entry can be offered.
The EUR/USD pair lost almost 850 pips since the beginning of 2015. Moreover, EUR/USD bears have already pushed the price slightly below the monthly demand level of 1.0550 (established on January 1997).
In the long term, a bearish breakdown of the monthly demand level at 1.0550 should not be excluded as the long-term breakout target is projected towards the level of 0.9450.
That is why bears failed to hinder ongoing bullish momentum around the key zone of 1.1150-1.1050 on April 29. Temporal bullish fixation took place above 1.1100 shortly after.
Bullish persistence above the level of 1.1190 allowed the market to push the price near 1.1390 (Fibonacci Expansion 100%). Early signs of bearish rejection are manifest on the chart.
Moreover, a double-top reversal pattern is being established on the H4 chart. Bearish breakdown of the neckline 1.1100 is needed to confirm the pattern.
The price zone of 1.1290-1.1330 constitutes as a perfect intraday SELL zone. Initial bearish target would be located at 1.1090 and 1.1000.
USD/JPY is expected to trade in a lower range. It is undermined by the broadly weaker USD undertone (ICE spot dollar index last 95.26 versus 96.40 early Monday) after a news report cited President Barack Obama as saying he was worried about a strong dollar was a problem, triggered liquidation of long USD positions, although the White House and Mr. Obama himself denied the report. USD/JPY is also weighed by lower US Treasury yields (2-year slipped 3.7 bps to 0.684% Monday), Japan's exports, and flows to haven JPY amid increased risk aversion (VIX fear gauge rose 7.6% to 15.29, S&P 500 closed 0.65% lower at 2,079.28 overnight). But USD/JPY losses are tempered by the lingering impact of strong US May non-farm payrolls report published on Friday, demand from Japanese importers, and ultra-loose Bank of Japan's monetary policy.
Technical comment: The daily chart is mixed as the MACD is bullish, but stochastics is turned bearish at overbought levels.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 123.75. A break of that target will move the pair further downwards to 123.40. The pivot point stands at 124.85. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 125.15 and the second target at 125.35.
Recently, EUR/NZD is moving downwards. In the daily time frame, we can observe an up-thrust bar (supply bar) around the level of 1.5930 in a high volume. We can see a fake bullish breakout in the background and strong bearish leg in the M30 time frame. My advice is to watch for potential selling opportunities after retracement. I placed Fibonacci retracement to find potential resistance levels. I got Fibonacci retracement 38% at 1.5785, Fibonacci retracement 50% at 1.5815, and Fibonacci retracement 61.8% at the level of 1.5845.
Trading recommendations: Be careful when buying EUR/NZD at thi stage since we got strong bearish leg in the background and also bullish fake breakout.
USD/CHF is expected to trade in a lower range. It is undermined by the broadly weaker dollar undertone (ICE spot dollar index last 95.26 versus 96.40 early Monday) after news reports cited US President Barack Obama as saying the strong dollar was a problem triggered liquidation of long USD positions, although the White House and Mr. Obama himself denied the report. But USD/CHF losses are tempered by the negative Swiss interest rates and the threat of the Swiss National Bank CHF-selling intervention.
Technical comment: The daily chart is negative-biased as stochastics is bearish, the MACD histogram bars are turning negative.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.9245. A break of that target will move the pair further downwards to 0.9210. The pivot point stands at 0.9360. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.9420 and the second target at 0.9475.
Fundamental Outlook: NZD/USD is expected to trade in a higher range. It is underpinned by the broadly weaker dollar undertone, kiwi demand on soft AUD/NZD cross, and NZD-USD interest differential. But NZD/USD gains are tempered by increased investor risk aversion, dovish Reserve Bank of New Zealand monetary policy stance, and low dairy prices.
Trading recommendations: The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 0.7170 and the second target at 0.7210. In the alternative scenario, short positions are recommended with the first target at 0.7080 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.7030. The pivot point is at 0.7105.
Fundamental outlook: GBP/JPY is expected to trade in a higher range. It is underpinned by the firmer GBP/USD undertone and demand from Japanese importers. But GBP/JPY gains are tempered by Japan's exports, lingering concern over Greece, and increased investor risk aversion.
Technical comment: The daily chart is positive-biased as the MACD is bullish, stochastics stays elevated at overbought levels, five-day moving average is above 15-day moving average and is advancing.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 189.70. A break of that target will move the pair further downwards to 189.10. The pivot point stands at 190.90. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 191.50 and the second target at 192.
Gold has been trading upwards. As we expected, the price tested the level of $1,182.76 in a high volume. In the daily time frame, we can observe a demand bar in an volume below the average (weak demand). I found the strong mid-term trading range between the levels of $1,230.00 and $1,169.00. The pair is testing strong resistance around the level of $1,185.00. Be careful when buying at this stage. We can observe buying climax (hidden selling) in the H1 time frame . Also, I found potential bearish flag. So, watch for potential selling opportunities of a breakout of lower diagonal.
Trading recommendations: Weak demand around the level of $1,183.00. Be careful when buying gold at this stage.
As anticipated, after breaking yesterday's support at the level of 1.2432, the market went down to the level of 1.2323, almost where the technical support is. Currently, the pair is trading in a very interesting zone, just above the important technical support at 1.2321. There is a high probability of a bounce and reversal in this zone, as wave (c) blue looks completed and the building bullish divergence on momentum oscillator supports this view.
As we have been repeating all the week so far, it is better to stay aside and wait for the corrective cycle to complete. Now the cycle might look finished and buying on dips is the way to trade on this market at the moment. Please use a tight SL (20-30 pips) and wait for a daily candle close: any level above 1.2321 would be a good indication of possible reversal coming soon.
The market is developing a typical corrective cycle called regular flat, where wave c green is in progress now. The first projected target is at the levels of 138.87 and the second is inside the supply breakthrough zone between the levels of 138.03 and 138.32. Please notice that only a sustained breakout above the last swing high would invalidate this count.
Daytraders should consider opening sell orders from current price levels with SL above the level of 140.01 and TP at the level of 138.87.
After AUD/JPY had tested 96.93 on June 3, it formed a double top reversal pattern. Prior to that, the pair had broke below the uptrend trendline signalling that the uptrend might be over.
The Fibonacci levels applied to the trend-line breakout point shows that the pair failed to test even the nearest support after the breakout, which is 38.2% Fibs – S2 (94.46). This could mean that AUD/JPY is prepearung to test S2, S3 or S4.
It is clear that the pair was trading around 61.8% Fibs – R1 (95.50) for the past tree weeks. This time, this level could act as a final bouncing point before the pair will start to move lower. Consider selling AUD/JPY anywhere between the current level and R1. Although, any of the support levels starting from S2 could be a target. It seems reasonable to target the final fibonacci level, which is S4 (92.74). Only a break above R2 (96.17) could result in a potential triple top.
GBP/USD formed a double bottom reversal pattern after testing the area of 1.52 for the second time on June 5. The pair has also broken above the 200D moving average that could be a signal of a potential range trading, where the rate would move around the MA.
Amid these conditions, it seems the best to use overbought/oversold oscillator readings in order to capitalize during consolidation. Currently, stochastic oscillator is in the oversold zone, which could be a good entry point to go long.
Therefore, consider buying GBP/USD around the current level (1.5290) targeting 50% Fibonacci retracement level (1.5430 area) applied to 1.5698 (a high back on May 21) and 1.5169 (a low back on June 1). Only a daily close below the minor support S1 (1.5264) could push the price further down to form a triple bottom, but I'd expect the rate to grown in the near future.
The EUR/USD pair broke major support at the level of 1.1310 last week. The level of 1.1325 became strong resistance. Also, it should be noted that the weekly pivot point is seen at 1.1126. Therefore it is likely to start moving downside in this area and recover again. So, the market will indicate a bearish opportunity at the level of 1.1310 and it will be a good sign to sell at this spot with the first target at 1.1180, and continue towards 1.1126 in order to test the weekly pivot point. On the other hand, if the trend manages to break the level of 1.1335, the level at 1.1340 will be a good location to place stop loss at.
The weekly technical levels of the EUR/USD pair.
According to previous events, the EUR/USD pair has still been trading between 1.1126 and 1.1330.
Below the level of 1.1330, look for further downside with targets at 1.11 80 and 1.1130.
The stop loss should be set at 1.1340.
According to the previous events, the GBP/USD pair is still moving between the levels of 1.5271 and 1.5383. Also, it should be noted that the psychological level has set at 1.5291 which represents the weekly pivot point on June 9, 2015. Buy above the minor support at 1.5271 with the first target at 1.5330. In case the trend will be able to break the level of 1.5330, it might move towards 1.5414 in order to test the weekly resistance 1. On the other hand, look further downside below the resistances of 1.5414 and 1.5400 with targets at 1.5225 and 1.5201. It should be noted that a double bottom will be formed at the level of 1.5200 in the H1 chart.
The US Dollar Index has made a bearish reversal from the 61.8% retracement as we expected. It has reached the recent low and support in the area of 94.80-94.60. A beak below this level will increase the chances of new intermediate lows bleow 93.10.
The US Dollar Index is below the Ichimoku cloud. Gold was rejected at both the upper cloud boundary and at the 61.8% retracement. Yesterday, we got a bearish signal that warned bulls about it. On the other hand, bears want to break below 94.60 in order to put the level of 93.10 to the test.
Gold price bouncef off $1,170 yesterday. Today it is trading at $1,179, which was short-term resistance yesterday. I remain bearish in the long term. The support at $1,130-$1,140 is expected to be tested soon.
Gold price remains ina bearish trend inside the downward sloping channel. The price remains below the Ichimoku cloud and broken trend-line support. Short-term resistance by the kijun-sen is at $1,179. Support is at $1,170 and $1,162.
The weekly chart remains fully bearish as gold is trading below the red tenkan-sen indicator. The trend is bearish as the price is below the weekly cloud resistance and blow both the tenkan- and kijun-sen. Critical support is at $1,140-$1,130. If it gets broken, we will see a move towards $1,000.
Gold is trading around $1,177.00 now after having reaced lows at $1,161.00 earlier. The metal is seen to be producing a bullish morning star candlestick pattern on the daily chart, indicating potential reversal from the current levels. It is recommended to remain long for now and look for an opportunity to add further at current levels. Risk remains at $1,150.00. Immediate support is seen at $1,143.00 and lower. Rresistance is seen at $1,195.00 followed by $1,205.00, $1,215, $1,231.00, $1,235.00/40, and higher respectively.
Remain long for now, stop is at $1,150.00, a arget is open.
Silver have formed potential support, just below the level of $16.00 and bounced off higher for now. Please also note that the metal has formed an engulfing bullish candlestick pattern, indicating a potential reversal. The metal is trading around the level of $16.09 at the moment, preparing to rally towards at least $16.80/$17.00. It is hence recommended to remain long for now, with risk at $15.30. Immediate support is seen at the level of $15.80, followed by $15.60, $15.30, and lower. Resistance is seen at $16.80 followed by $17.20, $17.70, and higher respectively.
The EUR/JPY pair is stalling around the level 141.00 at the moment. Please note that fibonacci 0.618 resistance is faced at 141.00 as depicted here. Bearish reversal cannot be ruled out from the current price action. A push below 139.00 should accelerate the drop further lower. It is hence recommended to remain short for now with risk above the level of 142.00. Immediate support is seen at 139.00 (interim), followed by 137.00, 135.00, 133.00, and lower while resistance is seen at the levels 142.00 followed by 144.50 and higher respectively.
Remain short, stop is at 142.50, a target is open.
The GBP/CHF pair dropped lower towards 1.4200 yesterday. The pair making an attempt to form a base around 1.4150-1.4300 before resuming its rally. Please also note that the fibonacci 0.618 support is also around the level of 1.4150. Bulls should be poised to bounce off around 1.4150 towards fresh swing highs. It is hence recommended to remain long for now and also look to add further around the level of 1.4150, risk remains at 1.4050. Immediate support is seen at 1.4150, followed by 1.4000, 1.3850, and lower. Resistance is seen at 1.4450 followed by 1.4650, 1.4700, and higher respectively.
Remain ling for now, stop at 1.4050, target is open.
EUR/USD: The EUR/USD pair moved upwards by 200 pips on Monday, closing above the support line at 1.1250. Further bullish movement is possible and the next bullish targets are located at the resistance lines of 1.1400 and 1.1450.
USD/CHF: The USD/CHF pair moved downwards by 150 pips on Monday, closing below the resistance level at 0.9300. Further bearish movement is possible and the next targets are located at the support levels of 0.9250 and 0.9200.
GBP/USD: In a negative correlation attempt with EUR/USD, the cable has made some weak upwards efforts (though the general market outlook remains bearish). Only a movement above the distribution territory at 1.5450 would lead to a new bullish signal; otherwise sell short.
USD/JPY: This pair has been coming down gradually, starting from this week. This can be coased by a bearish correction in a context of an uptrend. It might happen that the price would go upwards from here, for the uptrend cannot be invalidated as long as the price is above the demand level of 123.00.
EUR/JPY: Once again, we see the euro at work (as other EUR pairs are also making a rally). In the next several days, what happens to the euro would dominate the cross. There is a Bullish Confirmation Pattern in this market. Thus, a further northward movement is possible.
The correction at 1.5920 has been very small. This is not common for corrections in the third wave. We are going to look for a clear break above 1.5920 to confirm that the correction in wave ii is over and wave iii is moving higher to at least 1.6308 and more likely even higher to 1.7154, in line with our expectations.
In the short-term, we will look for support at 1.5785, which is expected to protect the downside for a clear break above the resistance at 1.5920. The risk is that a flat correction is unfolding and a new test around 1.5716 will be seen before the next impulsive rally.
We are long EUR from 1.5800 and will place our stop at 1.5700. If you are not long EUR yet, Then buy EUR near 1.5785 or upon a break above 1.5920 and place the stop at 1.5700.
A correction from 141.06 was very small, which is not that uncommon during wave three corrections. We will be looking for a clear break above the base channel resistance-line near 140.75 confirming acceleration higher towards 144.03 as the first minor upside target. However, an extension of wave (iii) should be expected and that would call for a continuation higher towards 150.77 as the first extension target.
Short-term support is found at 140.27 and 139.85, which will ideally protect the downside for a clear break above 141.06. The risk is that some kind of flat correction is unfolding, but consolidation at 141.06 should remain rather small.
We are long EUR from 140.55 and will place stop at 138.75. If you are no long EUR yet, then buy EUR near 140.27 or upon a break above 141.06 and use the same stop at 138.75 for now.
After Japanese GDP data, JPY is trading higher against USD. The pair posted a big loss which completely erased Friday's gains at yesterday's session. Yesterday, we forecasted bearish views on USDX & USD related pairs. We said bulls had to close above 125.60 on Monday's session, but they failed. The parallel resistance is seen at 126.00. At today Asian session, the pair is trading at 124.44 compared to Monday's closing price of 124.48. We recommended selling below 125.00 with targets at 124.80 and 124.60. Selling will be tightened below 124.60 towards 124.25 and 124.00. We expect the pair to touch 123.75 prior to the US retail sales data report. It is likely to trade around 123.00 later. The pair formed a support base on 123.76. If bulls faile to hold this level, selling pressure will be tighten. The real problem for bulls will arise in case the price corrects below 123.70.0. Small buying opportunity for bulls is seen above 124.85 with targets at 125.00, 125.30, and 125.50. We recommend fresh buying only if the pair closes above 125.60 on a daily basis. Strong upswing is expected above 126.00 towards 129.00 and 133.00 or even 136.00.
The Canadian dollar edged higher against USD at yesterday's session. The Canadian buildings permits rose above expectations, but remains below the March readings. Contractors took $7.8 billion for building permits in April, 11.6% up from the previous month. That was the second consecutive monthly of an advance. Besides, housing starts data provided mild support to the loonie as well. The trend measure of housing starts in Canada was 181,231 units in May compared to 179,524 in April, according to Canada Mortgage and Housing Corporation (CMHC). A fall in oil prices depressed CAD in the longer term. Besides, USD enjoying longer-term bullish view ahead of the rate hike buzz.
Today, traders eye the US jobs data and Thursday's retail sales data.
Technical view: The pair extended its fall for the second day. The pair failed to hold the 100Dsma. In addition, bears managed to close below that. At todays Asian session, the pair exactly rejected at 100Dsma. The pair is trading below 20Wsma 1.2430 as well. These factors are sending mild bearish signals in the near term. The pair is trading at 1.2405 compared to Monday's closing price of 1.2411. The support is found at 1.2350 and 1.2310. Crucial levels for bulls are found at 1.2290. The pair made a double top at 1.2563 edge lower. The weekly support is found at 1.2230. Until the pair trades below 1.2430 and 1.2465, bears will expand lower targets at 1.2300 and 1.2250. The pair is trading on a verge of making a new swing low. We recommend fresh selling below 1.2350 with targets at 1.2325, 1.2295, and 1.2250. In case if the US delivers positive readings, buying will be available above 1.2475 with targets at 1.2500, 1.2510,1.2530, and 1.2550.
The USDX fell 1.3% at yesterday's session, after a strong two-day pullback. At yesterday's session, we forecasted bearish views on USDX & USD related pairs. The index is making a mild distribution pattern at 96.55. We add further bearish views on the USDX. Until the Index closes below 96.90, bears will aim at 93.90, 92.75, and 92. The strong support zone is found at 92.15 and 91.70. In the daily chart, lower lows and lower highs formation has been expanding. Today, bears try hard to close below 95.00 with a target at 93.90.
The cable hold the 50Dsma managed to close with 0.6% gains at yesterday's session. The weak US dollar provided bullish moves on the pound. The USD weakens against the majors.
Today, traders eye on the UK trade balance. We expect trade deficit to narrow in April. The recent expansion in the eurozone will support the UK exports.
Technical analysis: The cable has been trading in a falling bearish channel. If we look back, the cable and the EUR/USD started falling after a sharp rally 3 weeks ago. The euro broke the bearish channel and moved towards higher highs and higher lows. But the cable is still moving in a bearish channel. The cable set its course to higher lows in the H1 chart. At yesterday's session, we forecast weakness in the USDX. With support from USD, the cable is likely to breach the falling channel. Tomorrow, BOE governor Carney's speech is due. We expect bullish trade after the event.
In the H1 chart, the cable has been forming higher highs. In the four-hour chart, double bottom formation has been taking place. Until bulls hold the 1.5170, bullish views remain in play. With the help of these factors we recommend bullish vision with sl 1.5170. Today, the cable is likely to touch 1.5380 and 1.5405. We recommend buying with sl 1.5290 on an intraday basis, positional sl is found at 1.5170. Intraday resistance is seen at 1.5365 and 1.5425. The trend-change level remains at 1.5445. Strong bullish momentum looms above 1.5460 towards 1.5520 and 1.5700 initially. Pound bulls lost the support at 200D&ema. The same levels are acting as strong resistance. In case bulls manage to take it off, they will aim at 1.5700. On the down side, bears will get the control below 1.5150 with an initial target at 1.5090. The real panic situation looms below 1.5085. Intraday selling is available below 1.5290 with targets at 1.5265 and 1.5230.
The pair paused a 2-day losing streak, managed to close with 1.75% gains at yesterday's session. Germany data partially supported the euro. Industrial production output was up by 0.9% in April 2015 compared with the previous month according to the report from the Federal Statistical Office (Destatis).
Today's trade depends on the US jobs data.
The pair managed to hold the support at 100Sema twice, giving a strong close above 100Dema. The weekly support is found at 1.1050 20Wsma. The parallel resistance is seen at 1.1380 and 1.1410. In the four-hour chart, the pair has been making higher lows and higher highs formation. The nearest swing high is seen at 1.1467. Intraday support is found at 1.1240 and 1.1200. Until the pair extends the higher lows formation at 1.1050, use a dip to buy favoring the trend. On a positional view, until the pairs hold at 1.1050, bulls are likely to aim at 1.1540 and 1.1700 in the near term. To confirm this view, the pair must close above 1.1470. In the daily chart, higher highs are not reached yet. We expect the pair to hit 1.1350. At today's Asian session, the pair is trading at 1.1280 compared to Monday's closing price 1.1291. Intraday fresh buying is advised above 1.1310 aiming at 1.1350, 1.1380, and 1.1400. At yesterday's session, our selling forecast was not triggered.
When the European market opens, some economic news will be released such as Revised GDP q/q, and French Gov Budget Balance. The US will release economic data on Wholesale Inventories m/m, JOLTS Job Openings, and NFIB Small Business Index. So amid the reports, EUR/USD will move low to medium volatility during this day.
In Asia, Japan will release the Prelim Machine Tool Orders y/y, Consumer Confidence, and M2 Money Stock y/y. The US will release some economic data such as Wholesale Inventories m/m, JOLTS Job Openings, and NFIB Small Business Index. So, there is a big probability that USD/JPY will move with low to medium volatility during the day.
In a daily chart, the USDX had bearish momentum during the monday's session. The Index is looking to test the support level of 94.66 again. By the way, a breakout of that zone would open the road to reach the next support located around the level of 93.75.
The short term-outlook is bearish for the USDX, because it found dynamic resistance at 200 SMA in the H1 chart. Now, it's forming bottom at the level of 95.15, where we could expect a corrective rebound in favor of the bearish bias. Anyway, if the Index does a breakout of that zone, it could reach 94.63.
Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the US Dollar Index breaks with a bullish candlestick; the resistance level is at 95.71, take profit is at 96.16, and stop loss is at 96.32.
A daily chart is still showing a lower low pattern formation, as the pair remains below the resistance level of 1.5346. Now, we are expecting a lower continuation, because that resistance is very strong and the bearish bias is likely to start dominating the trend in the GBP/USD pair again. The MACD indicator is entering oversold territory.
At the H1 chart, the support zone of 1.5259 remains very solid, because the pair was rejected at that level. Now it's trying to break the resistance level of 1.5358. The next higher target is seen at 1.5428 level, which is above the 200 SMA. However, that moving average could act as dynamic resistance.