Doji On EUR/USD, Gold Signals A Correction
ORBEX | Jun 07, 2016 04:48AM ET
The US dollar was muted to Yellen’s speech in Philadelphia yesterday, but the doji candlesticks on EUR/USD and gold signal a near term correction in prices. In EUR/USD , watch for a pullback to 1.120 region, while gold prices could fall back to 1230 – 1225 support level. With the remainder of the calendar light for the US dollar, markets could remain in a consolidation ahead of next week’s FOMC and BoJ meetings.
EUR/USD Daily Analysis
EUR/USD (1.135): EUR/USD closed with a doji yesterday and a bearish follow through today could see prices starting to pull lower. Price tested the resistance levels of 1.14 - 1.1380 yesterday. We currently see a strong hidden bearish divergence in EUR/USD with the current lower highs in prices. Correction in the EUR/USD could see prices test previous major support at 1.12170. The EUR/USD bias remains sideways for the moment.
USD/JPY Daily Analysis
USD/JPY (107.8):USD/JPY was bullish yesterday, but price action is yet to signal the shift to the upside. A daily close above 108 is essential in order to expect more upside in USD/JPY. There is also a bullish divergence showing on the daily charts but needs to be confirmed only when prices can close above 108. On the 4-hour chart, the strong pullback seen since yesterday comes with the risk of prices breaking down lower with the hidden divergence in play. Above 108, USD/JPY could move into a sideways range below 109.35.
GBP/USD DailyAnalysis
GBP/USD (1.447):GBP/USD was trading weaker yesterday, but prices managed to hold above 1.44250 support. However, the multiple tests of support near 1.4358 - 1.435 resulted in prices being rejected strongly and was followed by a move above the near term support/resistance at 1.4461 - 1.4445. Further upside could be seen to fill yesterday's gap near 1.4517. Establishing support at 1.4461 could see prices consolidate within 1.4647 - 1.44610.
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Gold Daily Analysis
XAU/USD (1243):Gold prices closed in a doji yesterday following Friday's strong bullish run. The lower time frame chart shows a bearish divergence occurring which could pull prices lower to correct near the 1230 - 1225 broken resistance level which could be tested for support. To the upside, the correction should see a move towards 1250 followed by a test of resistance at 1262 - 1258 level. The correction to 1230 - 1225 is also seen on the H4 with the hidden divergence as prices make a lower high on the higher high in Stochastics.
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