Daily FX Technicals: May 05, 2014
ICN.com | May 05, 2014 05:55AM ET
The pair dropped last Friday and witnessed a strong negative pressure, but bearishness was halted before the pair could break below 1.3780 keeping the upside move over intraday and short basis. The bullish possibility is still available, whereas Linear Regression Indicators are still positive as the pair is currently trading above 23.6% correction at 1.3850.
Trading above 23.6% correction triggers attempts to breach the resistance 1.3905 then the previous top 1.3965 and the psychological barrier 1.4000. Breaching 1.4000 and stabilizing above it might extend the upside move. On the other hand, breaking 1.3780 and stabilizing below it could fail the positive outlook.
Last Friday, the pair fluctuated heavily and MACD almost achieved a negative crossover, but the pair managed to gain bullish momentum from levels around the support 1.6820 then moved back to the upside failing the negative crossover. Hence, Linear Regression Indicators maintained its positivity and the positive line of AROON Indicator is still above line 70 despite the weak signals of the upside move.
Therefore, the general positivity is still valid and we still think there is a new bullish attempt this week, as breaching 1.6920 could start a new bullish wave that will lead to touching the psychological barrier 1.7000. A break above 1.7045 later strengthens the upside move. From the downside, levels 1.6780 should remain stable to keep the positive expectations valid, but we prefer to remain stable above 1.6820 to strengthen the bullish possibility.
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USD/JPY reversed sharply, forming a major shooting star candle at the 50-days SMA, hinting renewed strong bearish pressures, accordingly, more downside is likely this week, for a possible retest of 101.35 horizontal support, and the rising trend line for the overall bullish trend, which also near the 200-days SMA. Stability below 102.80 shall keep the bearish bias dominant.
USD/CHF fluctuated heavily on Friday, but remains under pressure ending the day lower, as price continues to fluctuate in a sideways bias. A break below 0.8770 and the ascending support shown on the daily chart above is required to signal more downside. Accordingly, we prefer to be neutral in our weekly report, awaiting a confirmation signal.
USD/CAD moved slightly higher on Friday, but price remains below the key overhead resistance at the 50-days SMA and 1.1050 horizontal resistance level, holding below that resistance keeps the bearish scenario favored for today, and stability below 1.0940 may confirm another bearish wave.
The AUD/USD fluctuated heavily on Friday, however price rebounded higher forming a dragon-fly doji candle at the rising trend line, which suggests the rebound will probably continue and price could be heading to resume the bullish wave that started from 0.8660 low.
NZD/USD extended the upside following the breakout of the falling wedge formation, as price settles above 0.8640-0.8635 horizontal resistance level, and thus confirms more upside likely in the near term. Holding above 0.8590 keeps our bullish bias intact.
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