Technical Analysis by Admiral Markets

[Admiral Markets]

Major Currency Pairs - Technical Update

On Monday, the US Dollar edged up against most major currencies (EUR, AUD, NZD) but was slightly weak against GBP as investor continue focusing on the geopolitical developments. On Tuesday, the US Dollar carried over its recent strength against EUR, GBP, AUD and NZD ahead of some economic releases, which might provide some cues for traders in the Forex market.

Meanwhile, here is a technical update on EURUSD, GBPUSD, AUDUSD and NZDUSD.

EURUSD

After a recovery from weekly lows on Friday last week, the pair resumed its downward trajectory and is now headed back to a 9-month low touched in the previous week. From current levels the pair seems to continue dropping towards 1.3315-1.3300 important support area, marked by a descending trend-line support visible on daily chart. A decisive break below the trend-line support is likely to trigger additional weakness for the pair towards 1.3230 support area, representing 61.8% Fib. retracement level of July 2013 to May 2014 upswing. On the upside, 1.3380 area, 50% Fib. retracement level, now seems to act as immediate resistance for the pair. This is closely followed by a very strong resistance near 1.3420-30 area, which if conquered could immediately lift the pair back towards 1.3500 mark.

GBPUSD

Following a drop below 100-day SMA in the previous week, the pair now seems to have decisively weakened below 1.6800 round figure mark support. Should the pair continue trading below 1.6800 mark, it seems more likely to continue drifting lower towards 200-day SMA support, currently near 1.6650-30 zone, also coinciding with 23.6% Fib. retracement level. Intermediate support on the downside is pegged near 1.6700 round figure mark. Meanwhile on the upside, the pair now seems to face stiff resistance immediately near 1.6800-1.6820 horizontal zone and only a move above this immediate resistance could possibly lift the pair back towards testing support turned resistance area at 100-day SMA, currently near 1.6880-90 area.

AUDUSD

The pair has decisively dropped below 23.6% Fib. retracement level and now seems vulnerable to continue weakening towards 0.9200-0.9180 support zone, comprising of 200-day SMA and 38.2% Fib. retracement level. Further, a break below 200-day SMA has the potential to infuse additional near-term weakness for the pair towards testing sub-0.9100 round figure mark, representing 50% Fib. retracement level. On the upside, 23.6% Fib. retracement level near 0.9300 has now emerged as immediate strong resistance for the pair and only a decisive strength above 0.9300 area could possibly negate any short-term bearish outlook for the pair. A decisive break above 0.9300 immediate strong resistance could immediately lift the pair back towards 100-day SMA resistance, currently near 0.9340-50 area.

NZDUSD

Although the pair seems to have decisively broken below a very important support near 0.8460-50 zone, comprising of 200-day SMA and 50% Fib. retracement level of Feb. to July 2014 up-move, it seems to find some intermediate support near 0.8400 round figure mark, also coinciding with low touched in June 2014. A drop below 0.8400 mark seems to provide additional room for further depreciation towards 61.8% Fib. retracement level, near 0.8350 region. Alternatively, should the pair continue holding above 0.8400 and move back above 0.8440-50 support turned immediate resistance area, it could possibly reclaim 0.8500 mark and move towards 38.2% Fib. retracement level near 0.8530-40 zone.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Gold Technical Update

Earlier this month, Gold rebounded from a very strong support confluence near $1280 area, comprising of 200-day SMA, 61.8% Fib. retracement level of June-July up-swing and a descending trend-line support also forming part of a bullish chart pattern, Falling Wedge. The yellow metal cleared $1300 psychological mark after decisively breaking from a bullish chart pattern formation.

On Monday, after registering its first weekly gain in four week, the yellow metal traded in a narrow range as investor continue to remain cautious and focus on geopolitical developments in Iraq and Ukraine. The metal still continued holding above 38.2% Fib. retracement level.

Considering that the metal rebounded from a very important support of 200-day SMA and the current up-move is well supported by a break above a bullish chart pattern formation, the metal could easily continue with the up-move towards $1320-25 immediate resistance zone, also coinciding with 23.6% Fib. retracement level. A decisive move above this immediate resistance now seems to trigger additional near-term strength for the metal. The metal then seems more likely to clear July 2014 highs resistance near $1245-50 area and continue appreciating towards $1400 psychological mark resistance.

On the downside, $1305-1300 area marked by 38.2% Fib. retracement level might continue to act as immediate support for the yellow metal. This is followed by another important support at 50% Fib. retracement level, near $1290 region. Failure to hold $1290 support area, could possibly negate continuation of the short-term bullish outlook and would open room for further decline towards June 2014 lows support near $1250-40 level.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Outlook: Important JPY Pairs

Early today, Japanese economic calendar flashed some important readings which said the preliminary estimations of Q2 2014 GDP plunged to the lowest level since Q1 2009 as the sales tax hike in early April dent the economy. Further, minutes from the recent monetary policy meeting of Bank of Japan revealed that the policy makers were scattered about the economic outlook of the world’s third largest economy as uncertainty about the global export market dent the inflation outlook. Moreover, the safe haven demand of the currency has been waning since the start of the week as geo-political crisis in Eastern Europe and in the Middle East eased during last weekend. Meanwhile, the following is a brief technical overview of USDJPY, EURJPY, GBPJPY and AUDJPY.

USDJPY

USDJPY has been trading in the range of 130 pips, as marked by the 50% and 23.6% Fibonacci Retracement level of its October 2013 to December 2013 up-move, for the most part of the year. Having reversed from its 200-day EMA support, on Friday, the pair managed to break the 50-day EMA, 100-day EMA and 38.2% Fibo. level confluence zone, between 102.00 – 102.10, during early week. From the current level, 102.80 and the psychological level of 103 become immediate resistances for the pair, breaking which it can surpass 23.6% Fibo. level by testing 103.40 level. Should the pair breaks the 103.40 level, 104.10 can cap the medium-term up-move of the pair. Alternatively, 102.10 – 102, confluence zone of multiple indicators, can provide strong support on the downside, breaking which the 200-day EMA, near 101.50, may become immediate support. Given the pair’s ability to successfully break the 101.50 level, it can break its 101 support level, coinciding 50% Fibo. level, and test the 100.50 level which can become medium-term important level for the pair.

EURJPY

EURJPY continued following the descending trend channel formation since mid-May; however, the pair reversed from the support line of the channel, during late Friday, and is currently testing the 50% Fibonacci Retracement Level of its August – December 2013 up-move. Should the pair breaks above its current resistance level near 136.90 – 137 zone, which seems more likely considering the MACD line, 137.70 can become next resistance for the pair to test which is closely followed by the important psychological resistance level of 138, also encompassing 200-day EMA and resistance line of descending trend channel. On the downside, 136.30 becomes immediate support to the pair, followed by the medium-term support zone of 135.70 – 135.50, including support line of the channel and the horizontal support line.

GBPJPY

GBPJPY retesting the ascending trend line support, stretched from November 2013, near 171.40 level, which is closely followed by the psychological support level and the 38.2% Fibonacci Retracement Level of its February – July 2014 up-move near 171. A sustained trading below 171 can force the pair to test 169.70 – 169.50 region, including 50% Fibo. level, which is likely to limit the medium-term downtrend of the pair. On the upside, 172.70, encompassing 50-day EMA and 23.6% Fibo. level becomes immediate resistance for the pair, breaking which 173.60 and 173.80 becomes next resistances for the pair. On the successful break of 173.30 (descending trend line resistance), the 174.50 level is likely to become crucial resistance for the up-move of the pair.

AUDJPY

Having reversed from its 200-day SMA support, near 93.90 level, on Friday, the pair managed to trade above its 23.6% Fibonacci Retracement Level of its February – April 2014 up-move. From the current level, the 100-day SMA near 95.35 becomes immediate resistance for the pair, breaking which the pair can rally to 96.00 and the yearly high of 96.50 levels. A sustained trading above 96.50 can cause the pair to test 97.70 level. On the downside, 23.6% Fibo. level near 94.50 is likely to provide immediate support to the pair, breaking which 93.90 – 93.85 region, including 200-day SMA, can be next rest for the pair which is likely to become medium strong support for the pair.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Outlook - EURGBP, EURAUD and EURNZD

Following the release of disappointing German ZEW economic sentiment index on Tuesday, the Euro-zone shared currency - EUR, weakened against GBP, AUD and JPY but still managed to hold on to some of its early gains against NZD. Investors will now focus on some dominant economic data from this week's Euro-zone economic calendar, which includes the release of preliminary composite Euro-zone GDP data along-with Euro-zone's two largest economies, Germany and France for the second-quarter of 2014.

Given the backdrop, here is a technical outlook for some important EUR cross currency pairs – EURGBP, EURAUD, EURNZD and EURJPY.

EURGBP

On Wednesday, following BoE's signal to postpone the first rate-hike should wage growth continue to remain weak helped EURGBP recover sharply from 0.7900 round figure mark. The pair is very close to a one-month high touched on Friday last week, nearing 0.8000 mark also coinciding with 23.6% Fib. retracement level of March to July 2014 down-leg. From current levels, the pair seems more likely to surpass 0.8000 mark resistance area and continue rising towards 0.8030-40 intermediate resistance with the near-term upward trajectory expected to continue till 38.2% Fib. retracement level resistance near 0.8070-80 zone, also coinciding with 100-day SMA. On the immediate downside, 50-day SMA near 0.8970 now seems to protect immediate downside for the pair. However, 0.7900 region now seems to have emerged as a very important support on the downside. Only a decisive break below 0.7900 could possibly negate the expected short-term upward momentum for the pair.

EURAUD

The pair continues trading in a well established down-trend as reflected by a descending trend-channel formation on daily chart. Moreover, the pair has repeatedly failed to clear 50-day SMA immediate resistance, further suggesting continuation of the downward momentum. From current levels the pair seems more likely to continue dipping towards 1.4300 round figure mark support, which if broken could force the pair to drop to fresh 2014 lows towards testing the lower trend-line support of the descending channel near 1.4020-40 zone. However, a decisive move above 50-day SMA resistance, currently near 1.4430-40 zone, and subsequent strength above the upper trend-line resistance of the descending channel near 1.4500 round figure mark, seems to trigger a sharp up-move for the pair towards 1.4700 mark horizontal resistance area.

EURNZD

On 4-hourly chart, the pair seems to trade in a short-term ascending channel formation. Also on Tuesday the pair managed to move above 100-day SMA resistance for the first time since Feb. 2014. Immediate downside support is pegged near the lower trend-line of the ascending channel near 1.5780 level. A decisive break below this immediate support would now be seen as a break-down and the pair could immediately drift lower to 1.5720-1.5700 horizontal strong support zone. Alternatively, should the pair continue holding the lower trend-line support, it has the potential to continue rising in the near-term towards 1.5940-50 resistance zone, representing the upper trend-line resistance of the ascending channel.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Outlook - GBPAUD and GBPNZD

On Wednesday, GBP dropped sharply against most major currencies after BoE lowered this year's wage-growth to 1.25% from its previous projection of 2.5% and hinted to postpone the first rate-hike should wage growth continue to remain weak.

Given the backdrop, here is a technical update on GBPAUD and GBPNZD.

GBPAUD

Following a decisive drop below 200-day SMA in late July, the pair now is finding it difficult to move back above the very important moving average. Further, the pair on Wednesday decisively broke below 100-day SMA and is now very close to a very important support near 1.7900 area, comprising of 50% Fib. retracement level and an ascending trend-line support extending from Nov. 2012 through lows tested in April and June 2014. Weakness below this important support could immediate open room for an immediate near-term weakness till 1.7700 horizontal support area with intermediate support at 1.7800 round figure mark. Meanwhile on the upside, 1.8000 psychological mark, which is closely followed by 100-day SMA near 1.8050-70 zone, now seems to provide immediate resistance for the pair. However, major resistance, which could possibly cap any near-term upside for the pair is pegged near 1.8200 area, constituting 200-day SMA and 38.2% Fib. retracement level.

GBPNZD

After failing to decisively conquer 2.0000 psychological mark earlier in August, the pair on Wednesday dropped to a three week low but just managed to hold its neck above 1.9700 round figure mark, also coinciding with 200-day SMA. Considering Wednesday's sharp drop, a drop below 1.9700 seems to further drag the pair towards 1.9620-1.9600 horizontal support area and subsequently towards a very important support near 1.9550 area. Alternatively, should the pair manage to hold above 200-day SMA support and move back above 1.9800 mark, also representing 23.6% Fib. retracement level, the pair would be all set to conquer 2.0000 psychological mark and continue appreciating towards Feb. 2014 highs horizontal resistance near 2.0200 region.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Outlook: US Dollar Index (I.USDX) and Silver

US Dollar Index (I.USDX), which measures the US Dollar strength against a basket of six currencies, has been rising since the start of July and tested the year’s high during early days of August as the Geo-political tensions coupled with the improvements in US labor market strengthened greenback. Further, silver prices, which follow the gold prices and are inversely related to US Dollar in general, have recently tested the eight weeks’ low.

Given the backdrop, the following the technical overview of the I.USDX and Silver prices.

US Dollar Index (I.USDX)

US Dollar Index (I.USDX) recently tested the horizontal resistance line, near 81.70, by marking the year’s high; however, failure to cross the resistance level caused the index to fall back to 38.2% Fibonacci Retracement Level of its July-October 2013 downturn, near 81.20 levels. The index once again heading towards the resistance line and a break of the same, near 81.70 – 81.75 region, can fuel it towards immediate resistance level of 81.90, the 50% Fibo. level, breaking which 82.10 can become next level of the resistance, also coinciding the upper line of ascending trend channel, before the index rallies to 82.40 and t he 61.8% Fibo. level near 82.55. On the downside, 38.2% Fibo. level near 81.20 continues to provide immediate support to the index, breaking which the support line of the channel near 81.00 becomes a crucial level of support. Should the index falls below 81.00, it is likely to extend its downfall to 80.60 – 80.55 support zone. Considering the overbought level of RSI, it is likely that the index witnesses a mild pullback before rallying to the new highs by following the ascending trend channel.

Silver

Silver prices are trading between the horizontal support, near $19.70 – $19.68, and the 76.4% Fibonacci Retracement Level of its June – August 2013 up-move, near $19.85. The RSI levels are showing the weakness into the metal prices and signaling the down trend towards a test of $19.45 level, should the current range of trading breaks out on the downside. On the break of $19.45, the psychological support level of $19 can become an intermediate support level before the metal plunged to $18.60 levels and the 2013 low of $18.20. On the upside, the 100-day EMA near $20.25 becomes an immediate resistance for the silver prices, breaking which 200-day EMA, near $20.55, can become intermediate resistance for the silver prices before it rallies to important descending trend line and 61.8% Fibo. level resistance near $20.90 - $21.00 region. A successful trading above $21 can fuel the white metal prices towards the test of $21.30 - $21.50 region.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Update - US Indices

Following a drop to the lower levels tested in the previous week, the US stock indices (Dow Jones and S&P 500) continued with the recovery to register minor gain, making it three days in past four trading sessions. Also on Thursday, the futures are indicating slightly higher open for both the indices.

Meanwhile, here is a technical update for both the indices – Dow Jones and S&P 500.

Dow Jones [DJI30]

Last week, the index recovered from an ascending trend-line support also coinciding with 50% Fib. retracement level and moved back above 200-day SMA. The index is currently hovering around 16680-16700 resistance zone, comprising of 100-day SMA and 23.6% Fib. retracement level. As was witnessed in the recent past, pull-backs were shorter and the index managed to resume its long-term up-ward trajectory. Considering the past price-action, should the index manage to climb above 16680-16700 resistance area, it seems more likely to climb further towards 16950-17000 area. Alternatively, should the index reverse from the current resistance level, it is likely to find immediate support near 16580 horizontal area. However, 38.2% Fib. retracement level near 16450 area might now act as an important Pivot for any further downward momentum for the index. Weakness below 16580 would confirm retest of the ascending trend-line support near 16300 mark with 100-day SMA, currently near 16400, acting as intermediate support.

S&P 500 [SP500]

The index recovered from 38.2% Fib. retracement level to move back above 100-day SMA and 23.6% Fib. retracement level. The index is currently near its immediate resistance near 1950 psychological mark. A decisive move above this resistance area could trigger immediate up-move towards 1970 horizontal resistance zone. Further, a close above 1950 might confirm continuation of the upward trajectory towards 2000 psychological resistance area. Meanwhile, reversal from current resistance levels and a drop back below 1935-30 support area, marked by 23.6% retracement level could immediately force the pair to retest 100-day SMA support, currently near 1920 level. Moreover, retesting of 100-day SMA would now suggests additional near-term weakness for the index towards 1875-70 area, marked by a medium-term ascending trend-line extending from June 2013 through lows tested in Oct. 2013 and Feb. 2014.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Outlook: GBPUSD, NZDUSD, USDJPY and AUDUSD

A halt to geo-political tensions at Gaza coupled with soft economic numbers from the US capped the US Dollar rally during last week; however, the greenback regained its power on the back of better housing numbers, released during early days of the current week, and the re-ignited tensions at Ukraine. Market players are waiting for minutes of recent FOMC meeting, scheduled to release on Wednesday, and the speech by Fed Chair, Janet Yellen, at Jackson Hole Symposium, scheduled for Friday, in order to get hints for the monetary policy actions of Federal Reserve.

Given the backdrop, the following is a brief technical outlook of GBPUSD, NZDUSD, USDJPY and AUDUSD pairs which are trading at decisive technical levels.

GBPUSD

On Tuesday, the GBPUSD closed below its 200-day EMA for the first time in 12 months; However, the release of Bank of England’s MPC Official Bank Rate Votes revealed that two of the policy members were in favor of a rate hike which triggered the GBP strength and the pair once again traded near its 200-day EMA and 23.6% Fibonacci Retracement Level of its July 2013 to July 2014 up-move, near 1.6630 level. From the current level, the 1.6630 – 1.6650 resistance zone, coinciding 200-day EMA and 23.6% Fibo. level becomes important for the pair, breaking which multiple resistance zone of 1.6735 – 1.6740 becomes immediate. On the break of 1.6740, it can rally to 100-day EMA level of 1.6840, while a sustained break of 1.6840 – 1.6850 zone negates the chances of short-term downtrend and can fuel the pair towards re-test of 1.7000 levels. Alternatively, a psychological support level of 1.6600, immediately followed by the 1.6550-45 multiple support-zone, becomes nearby rest for the pair, breaking which the horizontal line support zone of 1.6455 - 1.6450 becomes crucial for the pair. On the successful encounter of 1.6450 level, the pair becomes vulnerable to extend its downtrend towards re-test of February lows near 1.6280, also coinciding 38.2% Fibo. level.

NZDUSD

NZDUSD closed below its ascending trend line support, stretched from August 2013, on Tuesday and broke the critical support zone of 0.8400 – 0.8390, coinciding 38.2% Fibonacci Retracement Level of its June 2013 to July 2014 up-move, by making a low of 0.8372 during the current day. Should the pair closes below 0.8390 level, 0.8300 – 0.8290 becomes immediate rest for the pair, breaking which the pair can test 0.8260 – 0.8250, encompassing 50% Fibo. level. A sustained trading below 0.8250 negates the chances of near-term up-move by the pair and can make it vulnerable to test 0.8130 – 0.8125 support zone, including 61.8% Fibo. level. However, the oversold levels of RSI signals re-test of 0.8435-40, support turned resistance zone, including ascending trend line, which is closely followed by the 200-day EMA of 0.8495 – 0.8500 zone. Should the pair close above 0.8500, the 100-day EMA and 23.6% Fibo. level near 0.8565 – 0.8570 can cap the near-term up-move of the pair.

USDJPY

Having tested the important support zone of 102.10 – 102, including 50-day EMA, 100-day EMA and 38.2% Fibonacci Retracement level of its October 2013 to December 2013 up-move, during last weekend, the USDJPY rallied during the week and tested the 23.6% Fibo. level, 103.40, on Wednesday. Should the pair reverses from the current level, which is more likely considering the recent range between 102 and 103.40, together with the overbought level of RSI, it is likely to re-test its 102.70 – 80 support zone, breaking which it can re-test its 102.10 – 102, confluence zone of multiple indicators, can provide strong support on the downside. On the contrary, a successful break of 103.40 can fuel the pair towards 104 – 104.10 resistance zone, breaking which 105 level can become important for the pair before it rallies towards making new high of the year.

AUDUSD

AUDUSD is currently held between the range of 0.9300 – 0.9280, coinciding 100-day and 200-day EMA; however the RSI signals more of the downside which was proved right yesterday by the pair’s inability to surpass 61.8% Fibonacci Retracement Level of its October 2013 to January 2014 downturn. A successful trade below 0.9280 immediately follows the 0.9230 and the psychological support level, also including 50% Fibo. level, near 0.9200. Should the pair extend its downtrend below 0.9200, multiple support zone of 0.9130 – 0.9125 can cap the near-term fall of the pair. On the ohter hand, a break of 0.9300 is also followed by 0.9330 – 0.9335 immediate resistance zone, including 61.8% Fibo. level, breaking which 0.9400 is likely to become intermediate resistance before the pair rallies to 76.4% Fibo. level near psychological resistance level of 0.9500. A sustained trading above 0.9500 can fuel the pair towards 0.9580 - 0.9600 zone.

“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical Update - Important EUR and GBP Pairs

On Wednesday, most major currencies weakened against the rallying US Dollar as the minutes from Fed's latest monetary policy meeting showed growing consensus among FOMC members over the improving US labor market condition. The Fed minutes fuelled speculations of an earlier-than-expected interest rate hike, should the incoming data continue to point towards strengthening US economic recovery.

Meanwhile, here is a technical update for important EUR and GBP pairs – EURUSD, EURAUD, EURJPY, EURGBP, GBPAUD and GBPJPY.

EURUSD

On Wednesday, the pair decisively dropped below 1.3300 mark to the lowest level since Sept. 2013. In doing so the pair weakened below a descending trend-line support and is now finding some minor support at 38.2% Fib. retracement level of July 2012 to May 2014 up-swing. On Thursday, better-than-expected Euro-zone services PMI numbers helped the pair to recover from early loss. However, mixed manufacturing PMI numbers failed to further boost the pair beyond an important trend-line support break point, now turned immediate resistance, near 1.3290-1.3300 zone. Daily technical indicators are suggesting near-term oversold conditions and hence there seems to be a possibility of either a minor pull-back towards 1.3300 mark or consolidation at current levels. Considering the near-term over-sold conditions, the pair now seems unlikely to drop below 1.3340-30 immediate support area and a move above 1.3300 level could possibly get extended till 1.3350-60 horizontal resistance zone.

EURAUD

After retesting 50-day SMA immediate resistance in the previous week, the pair resumed to drift lower and is now hovering around 1.4300 round figure mark. Repeated failure to decisively conquer 50-day SMA seems to suggest continuation of the descending trend in the near-term. Hence, should the pair drop-back below 1.4300 mark, is likely to force the pair to retest 2014 lows and continue drifting lower towards testing the lower trend-line support of a descending trend-channel formation on daily chart, near 1.4000 psychological mark. On the upside, 1.4400-1.4420 zone, marking the confluence of 50-day SMA region and the upper trend-line resistance of the descending channel, continues to remain key resistance area. Only a decisive move above this strong resistance zone could possibly negate the expected bearish momentum of the pair.

EURJPY

Earlier this month the pair dropped to a fresh 2014 low but managed to find support near 38.2% Fib. retracement level of April to Dec. 2013 up-swing, forming a short-term descending trend-channel on daily chart. The pair currently is trading at 137.75 strong resistance area, comprising of 50-day SMA and the upper trend-line resistance of the descending channel. Hence, a decisive move above this immediate resistance area seems to trigger a sharp up-move towards 139.10-139.30 resistance zone, marked by 100-day SMA and 23.6% Fib. retracement level. Alternatively, a reversal from the immediate resistance area and subsequent drop back below 137.00 round figure mark could easily drag the pair back towards 2014 closing low level support near 136.30-20 zone and further towards hitting fresh 2014 lows.

EURGBP

The pair has failed to capitalize on its strength above 0.8000 psychological mark and reversed from an intermediate horizontal resistance near 0.8030-40 area. The pair, however, has not given up significant ground and is trading near 0.8000 mark, representing 23.6% Fib. retracement level of its March to July 2014 down-leg. Although, the upward momentum seems to continue in the near-term; however, the same could be confirmed only if the pair manages to move back above 0.8030-40 resistance area. Above this immediate resistance, the pair is likely climb immediate towards its next major resistance near 0.8070-80 area, comprising of 100-day SMA and 38.2% Fib. retracement level. Meanwhile, on the downside 50-day SMA, currently near 0.7960-50 area, seems to protect immediate downside for the pair. A decisive break below 50-day SMA now seems to trigger fresh down-leg for the pair back towards 2014 daily closing lows support near 0.7890 region.

GBPAUD

Following a drop-back below 100-day SMA, the pair now has decisively broken-out on the lower side of a short-term ascending channel formation on daily chart and 50% Fib. retracement level, indicating an upcoming near-term weakness for the pair. Hence, from current levels, the pair seems more likely to continue drifting lower to test April 2014 lows support near 1.7750-30 area. The near-term downward momentum is expected to continue till 1.7600 support area, marked by 61.8% Fib. retracement level. On the upside, 1.7940-50 zone now seems to act as immediate strong resistance for the pair, which if cleared is likely to confront another strong resistance near 1.8100 area, representing 100-day and 50-day SMA region. A move back above 1.8100 would categorize the current break-out below the ascending channel as fake-out and the pair could easily climb back to 1.8200 resistance and subsequently to 1.8350-70 horizontal resistance area.

GBPJPY

The pair continues to find strong support at 200-day SMA region (171.00-170.80 zone), also representing 38.2% Fib. retracement level of Feb. to July 2014 up-swing. However, even after its sharp rebound on Wednesday from 200-day SMA, the pair seems to find difficulty in clearing 172.50 area, previous strong support now turned immediate strong resistance, comprising of 100-day SMA and 23.6% Fib. retracement level. Hence, a decisive move above 172.50 region seems to immediately lift the pair towards 173.30-50 horizontal resistance area and further towards 174.40-50 horizontal resistance zone. Alternatively, a reversal from the immediate resistance area and a subsequent break below 172.00-171.80 immediate support area, could possibly confirm continuation of the near-term corrective move. The pair then could drop below 200-day SMA support towards testing its next major support on the downside near 169.50 level.




“Original analysis is provided by Admiral Markets”

 

[Admiral Markets]

Technical outlook: USDCAD, USDCHF, EURCAD and EURCHF

On Wednesday, release of recent FOMC meeting minutes re-ignited concerns for near-term rate hike by Federal Reserve and provided additional fuel to the on-going US Dollar rally. However, market players are waiting for the speech by Fed Chair at Jackson Hole Symposium, scheduled for Friday, in order to look for further details relating to the interest rate hike which can pave the strong ground for the US Dollar. Moreover, the Canadian Wholesale Sales, released on Wednesday, even after being ahead of forecast, tested the three month low and weakened the Canadian Dollar (CAD). Monthly releases of Canadian CPI and Retail Sales, scheduled for Friday release, are likely to provide hints for the near-term trading of CAD. The Swiss economic calendar is silent for the week.

Meanwhile, the following is the brief technical overview of USDCAD, USDCHF, EURCAD and EURCHF.

USDCAD

Ever since the USDCAD reversed from its ascending trend line support, stretched from September 2013, during early July 2014, the pair continued its up-move as signaled by another ascending trend line. The pair did reverse from its 200-day SMA during early weekdays and is trading near its important resistance zone of 1.0990 – 1.1010, including 38.2% Fibonacci Retracement Level of its December 2013 to March 2014 up-move, which has been a reverse point for the up-move of the pair. Should the pair break this resistance zone, which is more likely considering its recent strength, it can rally towards 1.1110, 23.6% Fibo. level; however, 1.1050 can play as an intermediate resistance level. On the successful encounter of 1.1110, the pair becomes vulnerable to test 1.1200 level before breaking the yearly high of 1.1277. On the contrary, the 50% Fibo. level, near 1.0915, immediately followed by the ascending trend line and 200-day SMA support zone of 1.0880 – 1.0890, becomes critical support levels for the pair. Given the pair’s ability to break 1.0880 level, it can extend its downtrend towards 1.0810, which can act as a medium-term support for the pair.

USDCHF

During the early weekdays, USDCHF reversed from its import zone of 0.9020 – 0.9010, also coinciding ascending trend line support, and is now trading at the highest level since January. Should the pair continue its up-move, the 0.9160 – 0.9170 can become important resistance zone for the pair before it rallies to 0.9190 and 0.9230 levels. On the successful run above 0.9230, the pair may extend its up-move towards 0.9290 – 0.9300 zone. On the downside, the ascending trend line support near 0.9030, immediately followed by 0.9020 – 0.9010 support zone, become short-term important levels for the pair. On the break of 0.9010, the confluence zone of 100-day and 200-day SMA, near 0.8935 – 0.8930 zone, can act as a strong support for the medium-term downtrend of the pair.

EURCAD

EURCAD has been coming down slowly and gradually towards its 50% Fibonacci Retracement Level of July 2013 to March 2014 up-move, also coinciding psychological support level of 1.4500. The immediate rest is closely followed by horizontal line support zone of 1.4420 – 1.4410 which can limit the near-term downtrend of the pair. Should the pair successfully break the 1.4410 support level, also closing below psychological level of 1.4400, it can become vulnerable to test 1.4250 levels. On the upside, 1.4620, followed by the 200-day EMA near 1.4665, can cap the near-term up-move of the pair, before it rallies to 38.2% Fibo. level of 1.4750. A sustained trading above 1.4750 can fuel the pair towards a re-test 1.4900 levels.

EURCHF

Having reversed from its January 2013 low, during last Friday, EURCHF broke the descending trend line resistance near 1.2110 during early hours of Thursday; however, failure to sustain the breakdown once again signals the continuation of downtrend towards psychological support level of 1.2100. On the break of 1.2100, the 1.2090 and the recent low of 1.2086 become important for the pair before it plunges to sub 1.2050 levels. On the upside, a sustained trading above 1.2110 can fuel the pair towards test of multiple support turned resistance level of 1.2130, breaking which the pair can rally to 1.2150 levels.

“Original analysis is provided by Admiral Markets”