3 pairs to watch - GBPUSD, USDCAD and CHFJPY
The GBPUSD came under pressure last week with the market closing at its lowest weekly level in over a month. On Friday, price broke below a rising trendline that had acted as support and also fell beneath the 1.2845 level - a key prior swing level. The trend remains higher for now but the 8 (yellow line) and 21 (red line) EMAs on a D1 chart are converging and could be close to a bearish cross (8 moving below 21).
Possible support: 127.55, 1.2560, 1.2360
Possible resistance: 1.2845, 1.3045, 1.3250
The market fell lower last week to test the lower bound on a rising trend channel that has contained price since the turn of the year. After trading up to a 2017 high (1.3790) at the start of May price has pulled back and is now at a potentially pivotal point going forward. Whilst the market remains above this rising trendline the longer term uptrend remains intact but shorter term the trend has turned down - as signalled by the bearish orientation of the 8 and 21 EMA (8 below 21). A break below last week’s low at 1.3386 would change the outlook for this pair and could see further declines ahead.
Possible support: 1.3386, 1.3280, 1.3185
Possible resistance: 1.3535, 1.3655, 1.3790
This pair ended the week little changed after testing a rejecting a key resistance zone form 115.25-115.50. This is a major level for three reasons;
1) This region marks the 2017 high and on several occasions the market has tested and failed to move above this swing level.
2) A falling trendline seen from the high of 137.24 currently resides here.
3) The 38.2% fib retracement (taken from closing prices) of the decline since that high is at 115.43.
For these reasons traders may consider the region from 115.25-115.50 of critical importance. If price can make a clean break above here then the outlook for the market would change and a substantial follow through on the recent rally may occur. Alternatively if the market remains below this level then the rise seen in the past month may be pared back.
Possible support: 112.90, 111.20, 109.40
Possible resistance: 115.25, 115.50, 119.60