Admiral Markets
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Technical Overview - Important GBP and EUR Pairs
Stronger-than-expected UK PMI figures on Tuesday and Wednesday (manufacturing and construction PMI) continued to boost GBP against most major rivals. EUR performance, meanwhile, remained mixed against the Australian (AUD) and Japanese (JPY) counterpart.
Investors now await for the center of attraction from this week's busy economic calendar, ECB monetary policy decision and US NFP data for the month of June, both scheduled on Thursday. Given the backdrop, here is a technical update on important GBP and EUR cross currency pairs - GBPAUD, GBPJPY, EURGBP, EURAUD and EURJPY.
GBPAUD
The pair continues hovering around 23.6% Fib. retracement level of Jan. to April 2014 corrective move and is attempting to decisively break above a descending triangular formation on daily chart. Should the pair manage to sustain the strength above 1.8175, it would probably negate the bearish formation and the pair could easily climb to 1.8300 mark with the near-term prospects of further appreciation to 1.8430-50 resistance zone, representing 50% retracement level. However, failure to conquer 1.8175 resistance and a drop back below 1.8050 support, could increase the vulnerability of the pair and the pair could then test the lower trend-line support of the triangular formation, currently near 1.7870-50 zone.
GBPJPY
Although the pair seems all set to continue appreciating after clearing a strong resistance near 173.50 area, it is however, likely to confront with another strong resistance near 174.80-175.00 area, representing the upper trend-line resistance of a short-term ascending trend-channel and also coinciding with the highs touched in Jan. 2014. A clear strength above this resistance area could further lift the pair towards 176.00-176.20 resistance zone, marked by 61.8% Fib. expansion level. Alternatively, a move back below 173.50 strong resistance turned immediate support, seems to drag the pair back towards testing sub-173.00 area, 172.70 level representing the lower trend-line support of the ascending channel.
EURGBP
The pair continued with the well established descending trend and on Wednesday dropped to a fresh 2014 lows. The current downfall seems more likely to continue till 0.7930 support, representing the lower trend-line support of a descending trend-channel formation on daily chart. A decisive break below the lower trend-line support, marking a break below the descending channel, might continue exerting pressure in the near-term. The pair, then, might continue its weakening trend towards testing another major support near 0.7800 mark. Any bounce-back from 0.7930 area is now likely to confront immediate resistance near 0.8000 round figure mark, which if breached might strengthen the pair, even beyond 0.8030-40 intermediate resistance, to 0.8090-0.8100 horizontal resistance zone.
EURAUD
The pair failed to conquer its immediate strong resistance near 1.4530-50 area, marked by the upper trend-line resistance of an ascending trend-channel on 4-hour chart. The pair is now heading back towards a very important support near 1.4400 mark, also coinciding with the lower trend-line support of the ascending channel. Should the pair fail to hold and decisive break below this important support, it seems more likely to drop below 1.4350, lows touched in June 2014, and continue depreciating immediately to 1.4300 round figure horizontal support area. Alternatively, a pull-back from 1.4400 support area might now be facing an immediate resistance near 1.4500 mark. However, major resistance on the upside continue to remain at the upper trend-line resistance area, currently near 1.4550-60 zone. Only a break above this resistance area could trigger a short-covering rally initially to 1.4600-10 zone and later towards 1.4730-40 resistance area.
EURJPY
After dropping below 200-day SMA, the pair bounce from a medium-term ascending trend-line support near 138.00-1.37.90 area, to retest the support break level of 200-day SMA. Although, the pair now seems to have confirmed a near-term bearish trend, but the same would be confirmed once the pair decisively breaks below the trend-line support. A decisive break below 138.00 level would clearly signal the up-coming near-term weakness for the pair and the pair might continue weakening towards 136.40-20 horizontal support zone. Meanwhile, any retracement from current levels could possibly be capped at 200-day SMA resistance, and only a decisive strength above this resistance might negate near-term bearish outlook. A move back above 200-day SMA could possibly lift the pair immediately towards 100-day SMA, currently near 140.30-40, and further towards 141.00 mark, also coinciding with the descending trend-line resistance extending from highs tested in Dec. 2013 and during March, April, May 2014.
“Original analysis is provided by Admiral Markets”
Stronger-than-expected UK PMI figures on Tuesday and Wednesday (manufacturing and construction PMI) continued to boost GBP against most major rivals. EUR performance, meanwhile, remained mixed against the Australian (AUD) and Japanese (JPY) counterpart.
Investors now await for the center of attraction from this week's busy economic calendar, ECB monetary policy decision and US NFP data for the month of June, both scheduled on Thursday. Given the backdrop, here is a technical update on important GBP and EUR cross currency pairs - GBPAUD, GBPJPY, EURGBP, EURAUD and EURJPY.
GBPAUD
The pair continues hovering around 23.6% Fib. retracement level of Jan. to April 2014 corrective move and is attempting to decisively break above a descending triangular formation on daily chart. Should the pair manage to sustain the strength above 1.8175, it would probably negate the bearish formation and the pair could easily climb to 1.8300 mark with the near-term prospects of further appreciation to 1.8430-50 resistance zone, representing 50% retracement level. However, failure to conquer 1.8175 resistance and a drop back below 1.8050 support, could increase the vulnerability of the pair and the pair could then test the lower trend-line support of the triangular formation, currently near 1.7870-50 zone.
GBPJPY
Although the pair seems all set to continue appreciating after clearing a strong resistance near 173.50 area, it is however, likely to confront with another strong resistance near 174.80-175.00 area, representing the upper trend-line resistance of a short-term ascending trend-channel and also coinciding with the highs touched in Jan. 2014. A clear strength above this resistance area could further lift the pair towards 176.00-176.20 resistance zone, marked by 61.8% Fib. expansion level. Alternatively, a move back below 173.50 strong resistance turned immediate support, seems to drag the pair back towards testing sub-173.00 area, 172.70 level representing the lower trend-line support of the ascending channel.
EURGBP
The pair continued with the well established descending trend and on Wednesday dropped to a fresh 2014 lows. The current downfall seems more likely to continue till 0.7930 support, representing the lower trend-line support of a descending trend-channel formation on daily chart. A decisive break below the lower trend-line support, marking a break below the descending channel, might continue exerting pressure in the near-term. The pair, then, might continue its weakening trend towards testing another major support near 0.7800 mark. Any bounce-back from 0.7930 area is now likely to confront immediate resistance near 0.8000 round figure mark, which if breached might strengthen the pair, even beyond 0.8030-40 intermediate resistance, to 0.8090-0.8100 horizontal resistance zone.
EURAUD
The pair failed to conquer its immediate strong resistance near 1.4530-50 area, marked by the upper trend-line resistance of an ascending trend-channel on 4-hour chart. The pair is now heading back towards a very important support near 1.4400 mark, also coinciding with the lower trend-line support of the ascending channel. Should the pair fail to hold and decisive break below this important support, it seems more likely to drop below 1.4350, lows touched in June 2014, and continue depreciating immediately to 1.4300 round figure horizontal support area. Alternatively, a pull-back from 1.4400 support area might now be facing an immediate resistance near 1.4500 mark. However, major resistance on the upside continue to remain at the upper trend-line resistance area, currently near 1.4550-60 zone. Only a break above this resistance area could trigger a short-covering rally initially to 1.4600-10 zone and later towards 1.4730-40 resistance area.
EURJPY
After dropping below 200-day SMA, the pair bounce from a medium-term ascending trend-line support near 138.00-1.37.90 area, to retest the support break level of 200-day SMA. Although, the pair now seems to have confirmed a near-term bearish trend, but the same would be confirmed once the pair decisively breaks below the trend-line support. A decisive break below 138.00 level would clearly signal the up-coming near-term weakness for the pair and the pair might continue weakening towards 136.40-20 horizontal support zone. Meanwhile, any retracement from current levels could possibly be capped at 200-day SMA resistance, and only a decisive strength above this resistance might negate near-term bearish outlook. A move back above 200-day SMA could possibly lift the pair immediately towards 100-day SMA, currently near 140.30-40, and further towards 141.00 mark, also coinciding with the descending trend-line resistance extending from highs tested in Dec. 2013 and during March, April, May 2014.
“Original analysis is provided by Admiral Markets”