Market Outlook: Cable Comes Under Pressure
FinFX | Mar 19, 2014 04:52AM ET
EUR/USD
The euro showed limited action during past few sessions, with price action moving within narrow 1.3880/1.3940 range, awaiting today’s FOMC decision. Hourly tone is neutral, as the price forms bullish pennant, while larger pictures maintain positive tone and favor eventual push towards short-term target at 1.4000. Recent range tops, along with bear-trendline off 1.3965, offer initial resistance, ahead of fresh high at 1.3965 and psychological 1.4000 barrier, also daily channel resistance. Break here to resume larger uptrend, interrupted by 1.3965/1.3840 corrective phase and expose next targets at 1.4056, double-Fibonacci resistance 138.2% expansion of the third wave from 1.3642 and 138.2% projection of the downmove from 1.3892 to 1.3475. Narrowed range floor at 1.3880 offers immediate support, ahead of the first pivot at 1.3840 higher platform / Fibonacci 38.2% retracement of 1.3642/1.3965 upleg and only break here would sideline near-term bulls in favor of deeper pullback towards 1.3800, 50% retracement / channel support; 1.3765, Fibonacci 61.8% retracement of 1.3642/1.3965 rally and 1.3700, higher base / round-figure support / 76.4% retracement.
Resistance: 1.3946; 1.3965; 1.4000; 1.4056
Support: 1.3900; 1.3880; 1.3840; 1.3800
EUR/JPY
The pair remains in extended sideways mode, consolidating last week’s sharp fall that bottomed at 140.43. Consolidative / corrective action is for now capped under initial barrier at 142.00, with near-term studies being negatively aligned that keeps the downside at risk. Break below the first support at 141.00, round-figure / trendline support to open 140.72 and pivotal 140.43, below psychological 140.00 support, also mid-point of 136.21/143.78 rally, will be open for test. Alternatively, sustained break above 142.00 handle and lift above 142.23, Fibonacci 61.8% retracement of 143.34/140.43 downleg / previous low of 12 Mar, would avert immediate downside risk for stronger recovery.
Resistance: 142.00; 142.23; 142.63; 143.00
Support: 141.00; 140.79; 140.43; 140.00
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GBP/USD
Cable came under pressure and ended the second day in red, after fresh weakness broke below near-term range floor, to post fresh low at 1.6544, where daily 55SMA contained dips for now. Weak near-term studies favor further downside, with psychological 1.6500 support, also daily Ichimoku cloud top coming next, ahead of 1.6451, Fibonacci 38.2% retracement of larger 1.5853/1.6821 ascend. Corrective rallies are expected to precede fresh leg lower, with regain of 1.66 handle expected to open 1.6646/64 barriers, where rallies should be ideally contained. Pivotal resistance lies at 1.6716, 13 Mar peak and only break here to improve near-term structure.
Resistance: 1.6608; 1.6646; 1.6664; 1.6700
Support: 1.6544; 1.6500; 1.6451; 1.6400
USD/JPY
Near-term price action moves in a consolidative mode above fresh low at 101.19, after the pair fully retraced 101.19/103.75 upleg. Near-term tone remains weak, as recovery attempts were capped under psychological 102 barrier, with descending 4-hour SMA limiting the upside for now and bull-trendline off 100.74 low being cracked. Break below 101.19 handle is required to open another significant support at 100.74, 03/05 Feb base and psychological 100 support in extension. Only break above 102.50 and 102.80, Fibonacci 61.8% retracement of 103.75/101.19 would improve near-term structure.
Resistance: 101.93; 102.17; 102.50; 102.80
Support: 101.29; 101.19; 101.00; 100.74
AUD/USD
The pair maintains positive near-term tone and eventually broke above psychological 0.9100 barrier, to crack key near-term resistance and pivotal point at 0.9132, on extension to 0.9137 so far. Positive near-term technicals keep the upside favored, with clear break above of 0.9132 barrier, expected to open 0.9151, 200SMA; 0.9165, 10 Dec 2013 high and 0.9206, 50% retracement of larger 0.9755/0.8658 descend. Corrective dips would face initial support at 0.91 zone, also hourly 55SMA and higher low at 0.9062, Fibonacci 38.2% retracement of 0.8923/0.9137, seen as ideal reversal point to keep bulls intact.
Resistance: 0.9137; 0.9151; 0.9165; 0.9206
Support: 0.9100; 0.9060; 0.9030; 0.9000
AUD/NZD
The cross trades in extended consolidative phase off fresh low at 1.0534, posted last week. Brief attempts above initial 1.0600 barrier were short-lived, with upside being capped by descending 4-hour 55SMA that keeps hourly studies weak. Also negatively aligned 4-hour technicals see limited upside actions for now and the downside at risk, as daily studies are bearish. Likely near-term scenario is seen on a fresh weakness through 1.0543 for extension to the short-term target and key support at 1.0488, 24 Jan low, to fully retrace 1.0488/1.0942 ascend and possibly trigger fresh leg lower on a break. Only break above 1.0644, 12 Mar spike high / 50% retracement of 1.0755/1.0534 downleg and daily Tenkan-sen line, would sideline near-term bears and signal stronger recovery towards 1.0671, 61.8% retracement; psychological 1.0700 and pivotal 1.0755, 07 Mar lower top.
Resistance: 1.0615; 1.0644; 1.0671; 1.0700 "
Support: 1.0565; 1.0534; 1.0500; 1.0488
XAU/USD
Spot Gold trades in extended corrective phase off fresh high at 1392, where bulls stalled on approach to psychological 1400 barrier. Fresh weakness reached 1350, near 61.8% retracement of 1319/92 rally, where the price found temporary footstep. With near-term studies being negative and limited corrective action capped by hourly 20SMA at 1362, downside remains at risk. Extension below 1350/47 supports to resume near-term bears and expose next supports at 1336, Fibonacci 76.4% retracement and 1327 higher platform in extension. Only lift above the first pivot at 1364 would delay bears and allow for stronger rally.
Resistance: 1359; 1364; 1374; 1382
Support: 1350; 1347; 1336; 1327
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