Technical Report: GBP/USD Moved To Upside, Still Limited
ICN.com | May 27, 2014 05:15AM ET
The price inched higher today but is still limited below Linear Regression Indicator 34 and 55 and below 23.6% correction at 1.3705. Trading below the referred to level keeps the downside move possible today.
Stochastic is showing a positive crossover below line 20, but we will ignore these signals now unless the pair breaks above 1.3750. On the other hand, breaking 1.3620 accelerates the downside move towards the target 1.3520 represented in 38.2% correction showing on graph.
The pair moved to the upside but is still limited below 1.6870 and the resistances 1.6920 - 1.6930. Stabilizing below the referred to level strengthens the bearish possibility especially that Linear Regression Indicator 55 tends to be negative. A break above 1.6930 brings positivity back to AROON Indicator that is showing weakness in the bullish strength.
Breaking 1.6790 is significant to confirm the downside move and get the pair out of the ascending channel, as breaking the bullish support of the ascending channel fails the possible bearish extension.
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After rebounding of the 200-days SMA and forming a bullish long legged doji candle, the price is hovering below the short-term descending resistance and the 50-days SMA as shown on the daily chart above. A break above that resistance area will probably confirm more upside and another wave higher towards 102.70 and 103.00 levels, while the bullish rebound scenario remains valid so long as 100.75 main horizontal support is intact.
The USD/CHF retraced slightly lower yesterday, however price continues to trade in a tight range below the 200-days SMA and around the major resistance level and neckline for a double bottom formation at 0.8950 areas. A decisive break above that resistance area is necessary to confirm a move higher; otherwise, we prefer to remain on the sidelines. Failure to hold above 0.8950 may signal a downside correction and a retest of 0.8995 support level.
The USD/CAD resumed the bearish bias after testing 1.0940 resistance level, where price maintains the recent structure of lower highs and that keeps the bearish correctional wave intact. The bearish scenario remains favored for a possible retest of the 200-days SMA around 1.0740 level, holding below 1.0940 keeps the bearish outlook intact.
The AUD/USD is attempting to rebound, following the retest of the major support area at 0.9205 which is the recent main swing lower, where price is retesting the 50-days SMA and intraday resistance ant 0.9270, a break above that resistance may call for further upside , towards 0.9325 level as an initial target. For now, we need to see stability above 0.9270 to confirm this scenario.
The NZD/USD bounced slightly higher, however price remains below the short term resistance level at 0.8600, which keeps the bearish bias favored, targeting a retest of the major support around 0.8500-0.8510. Only a break back above 0.8600 may signal a sustained bullish rebound. For now, the bearish scenario continues to be favored.
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