Market Outlook: Cable Come Under Pressue
FinFX | May 28, 2014 04:25AM ET
EUR/USD
The euro remains under pressure and returns to the levels near 1.36 support, following brief corrective attempt, which was capped under 1.3670, previous break point, with marginally lower low being posted at 1.3611. Near-term technicals are negative and favor further downside, with break below 1.36 handle to open the next targets at 1.3561, 12 Feb higher low; 1.3519, 38.2% retracement of larger 1.2754/1.3992 ascend and psychological 1.35 support, in extension. Alternative scenario, from the other side, requires confirmation of reversal, signaled by yesterday’s outside day candle, by close above initial 1.3667, recovery peak and 1.3672, Fibonacci 38.2% retracement of 1.3733/1.3611 downleg, to revive bulls and signal double-bottom formation. Extension above 1.3733 lower platform to confirm near-term base and open way for stronger recovery.
Resistance:1.3637; 1.3670; 1.3687; 1.3733
Support: 1.3625; 1.3611; 1.3600; 1.3561
EUR/JPY
The pair trades in near-term corrective phase off fresh low at 138.13, posted on 21 May, with price action in consolidative mode, off fresh high at 139.34, reached yesterday. Near-term studies are mixed, as hourlies are turning negative, while 4-hour tone is still positive. To maintain structure formed from 138.13 intact, the downside must stay protected at 138.70 higher base / 50% retracement of the rally from 138.13 to 139.34, where fresh attempt higher should commence. Break above 139.34 is needed to open strong 140.00 barrier, previous range floor and pivotal point for stronger recovery, seen on a break higher. Otherwise, sideways movements would be expected , while 138.70 holds and increased downside risk anticipated on a break lower, to expose recent low at 138.13, reinforced by 200SMA and bearish resumption on a violation of the latter.
Resistance:139.11; 139.34; 139.85; 140.00
Support: 138.70; 138.59; 138.13; 138.00
GBP/USD
Cable came under pressure yesterday, after leaving lower top at 1.6880 and fresh acceleration through bull-trendline support at 1.6835, which retraced nearly 61.8% of 1.6730/1.6919 upleg. Near-term indicators are establishing in the negative territory that keeps risk of full retracement of 1.6730/1.6919 rally and resumption of larger descend from 1.6917, on penetration of 1.6730 higher low. Initial signal of such scenario, requires break below 1.6795, main bull-trendline, drawn off 1.6464, 24 Mar low and fresh low at 1.6780, with daily studies building up bearish momentum and being supportive.
Resistance:1.6813; 1.6832; 1.6880; 1.6902
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Support: 1.6795; 1.6780; 1.6752; 1.6730
USD/JPY
The pair remains supported and posted fresh high at 102.13, with consolidative action under way, before fresh attempt higher. Consolidation low at 101.70 zone, reinforced by 20/55SMA’s bullish cross, is expected to hold and maintain positive structure, formed on 4-hour chart, to fulfill minimum requirement for bullish resumption on a break above 102.35, 13May lower top / daily cloud base. Otherwise risk of lower top forming under 102.35, would remain in play, as daily studies hold negative tone and overall price action being capped by 100SMA, which reinforces 102.35 barrier.
Resistance:102.04; 102.13; 102.35; 102.49
Support: 101.70; 101.63; 101.31; 101.10
AUD/USD
The pair holds near recovery highs, but fresh extension higher, seen yesterday, failed to break above initial barriers at 0.9272, recovery high and 0.9283, Fibonacci 38.2% retracement of 0.9407/ 0.9207 descend. Near-term studies remain positively aligned and supportive for further gains through 0.9283/0.9300 barriers, to re-confirm 0.9200 base and bring bulls back in play for further retracement of 0.9407/0.9207 fall. Break higher to open psychological 0.93 barrier, also 50% retracement and daily cloud base and 0.9330, previous consolidation range floor and 61.8% retracement. Conversely, slide below 0.9230, recent lows, to bring bears back in play and re-focus 0.92 support.
Resistance:0.9276; 0.9283; 0.9300; 0.9330
Support: 0.9250; 0.9230; 0.9200; 0.9172
AUD/NZD
The pair resumes rally off 1.0743 low, reinforced by daily 55/100SMA’s bull-cross, after leaving higher base at 1.08 zone and fresh bulls breaking previous peak at 1.0824 and heading towards the next barrier at 1.0874, 14 May high. Positive near-term technicals support the notion. Initial support lies at 1.0824, while loss of 1.08 handle would delay bulls and risk return to 1.0759/43 supports, loss of which will be bearish.
Resistance:1.0874; 1.0907; 1.0942; 1.1000
Support: 1.0824; 1.0800; 1.0767; 1.0759
XAU/USD
Spot Gold has eventually broken short-term sideways mode and established fresh direction, resuming large bear-trend off 1392 peak. Loss of key support at 1268 confirmed an end of range trading and bearish scenario. Fresh acceleration lower so retraced over 61.8% of larger 1182/1392 ascend, with near-term focus at the next targets at 1252; 1337 and 1231. Corrective rallies are expected to precede fresh weakness, as near-term studies are overbought. Former narrower range bottoms at 1285 zone, are seen as ideal cap. Only break above 1300 barrier would sideline fresh bears.
Resistance:1268; 1273; 1280; 1290;
Support: 1260; 1252; 1237; 1231
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