3 pairs to watch - EURUSD, CADJPY, EURGBP
The most widely traded FX pair has had a potentially major breakout this week and the range from around 1.0400-1.1500 that has largely contained price since the beginning of 2015 could now be over. The 1.1460 level remains of utmost importance on weekly charts and whilst price remains above here then further gains could well be in the offing. The high from the summer of 2015 could offer some resistance, but in the grand scheme of things it isn’t a major level and there’s a lot of room above for price to rally before prior swing levels will be tested. A break back below 1.1460 would change the market dynamic and could see a return to the prior range.
Possible support: 1.1460, 1.1312, 1.1150
Possible resistance: 1.7130, 1.1840, 1.2000
A long term inverse head and shoulders setup may be present here and whilst the breakout came last week, this week’s inside candle means that the potential setup remains valid. The most important level to watch here is 88.35 which serves as the neckline in this possible setup. Whilst the market remains above this level then the formation remains in play, with an ultimate target coming at 101.93.
Possible support: 88.35, 87.38, 86.30
Possible resistance: 89.31, 91.10, 93.00
Following last week’s decline, the strong bullish reaction this time out could be seen as revealing an underlying strength in the market. Price is set to close at its highest level since October and you have to go back more than 5 years to find a weekly close above 0.9015. The market has been trending higher since mid-April and in the absence of a reversal signal the path of least resistance appears to remain for higher prices.
Possible support: 0.8940, 0.9035, 0.9125
Possible resistance: 0.9035, 0.9125, 0.9256