3 pairs to watch - EURGBP, GBPJPY, AUDUSD
The market ended last week on the front foot and close to a potentially key resistance level at 0.8778. After breaking above a falling trendline from last year’s high of 0.9252 last month the market has continued to gain and price is now in an uptrend according to several long term indicators (50 and 200 day SMA and Ichimoku cloud). There’s several potentially major fundamental events for both the Euro (ECB meeting) and GBP (UK elections) this week so there could well be heightened volatility in this cross.
Possible support: 0.8685, 0.8600, 0.8520
Possible resistance: 0.8780, 0.8845, 0.8970
After breaking higher and up through the Ichimoku cloud in April the market rallied strongly stopping just short of its highest level in almost a year at 148.35. However recent weeks have seen something of a pullback and price is now close to retesting the cloud from above. Last Wednesday and Thursday saw successive days of strong gains but these were wiped out by a large bearish engulfing candlestick on Friday. There seems to be a case of a long term uptrend running into a shorter term downtrend and next week could well decide which will prevail.
Possible support: 141.50, 140.15, 139.15
Possible resistance: 143.50, 145.00, 148.35
The market ended last week little changed after a strong recovery on Friday saw a bullish engulfing candlestick printed on D1. The market has been steadily drifting lower since making a peak near 0.7750 in mid-March and is currently at a key level. For much of the decline the 8 period EMA (yellow line) has been below the 21 period EMA (blue line) but recently these two moving averages have converged. This allows a trend change signal to form relatively quickly and if the market rises in the coming days there may be a bullish cross printed and we could see an uptrend begin. Alternatively a failure to do so would keep the market under pressure and a move below last week’s low of 0.7375 would lead to more downside.
Possible support: 0.7375, 0.7335, 0.7265 (or the lower bound of the falling trend channel)
Possible resistance: 0.7465 (or upper bound of falling trend channel), 0.7515, 0.7610