Daily Technical Report : Major Currency Pairs
ICN.com | May 29, 2014 05:44AM ET
The pair is trading slightly to the downside triggered by the Linear Regression Indicator 34 and 55 below the 23.6% correction at 1.3705. Trading below the referred to level is neagtive and could extend the downside move towards 38.2% correction at 1.3520.
The Stochastic failed to maintain the upside move and moved back to the downside. The MACD Indicators are also trading in a bearish bias supporting the possibility of extending the downside move today. Over intraday basis, stability below 1.3665 strengthens the bearish possibility, while a break below 1.3580 triggers a noticeable bearish rally.
We notice a negative technical formation that could be the Double Top Pattern despite that forming the first top took a longer time than the second. The neckline of the pattern resides at 1.6735 and stabilizing below it strengthens the bearish possibility. In fact, trading below 1.6790 is negative because the bullish support of the ascending channel was broken as showing on graph.
The AROON Indicator is increasing the bearish strength and Linear Regression Indicators and MACD are negative. Hence, the downside move could extend depending on the pair's ability to break 1.6665 represented in 61.8% correction today as showing above.
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The pair is stuck between the SMA 50 and 100 that represents a resistance at 102.05 and the key support 101.30. As long as the pair is stable above this support, we still favor the upside move over short and intraday basis with main targets at 104.45 then 105.00. Of note, a break below 101.30 pushes the pair to target 98.75.
USD/CHF settled above the 0.8950 main resistance level and neckline for the major double bottom formation shown on the daily chart, where price is retesting the 200-days SMA, which may push for a downside correction. However, stability above 0.8950 suggests the completion of a bullish reversal pattern, and further upside in the near term.
USD/CAD continues to hover in a tight range above the minor broken descending resistance, while the RSI has shown a slight bullish divergence as shown on the chart above, and that warns for a potential bullish rebound. We prefer to wait for further confirmation of a bullish rebound or a break below 1.0855 to suggest the continuation of the bearish wave towards 1.0730-1.0740 next potential support area.
AUD/USD retested the 0.9210 support area before rallying higher again. The price is pushing back towards the 0.9270 resistance level and the 50-day SMA, where stability above the latter could confirm a bullish rebound; however, for now, we move to the sidelines awaiting confirmation.
The price is under heavy pressure, having broken below the main support area among 0.8515-0.8500 confirming a potential a major bearish reversal, where the next initial target is at the 0.8400 support area. Holding below 0.8515 for today shall keep the bearish bias dominant.
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