Last week, the broadly weaker Euro witnessed a pullback against majority of its counterparts as heavy decline, since last few months, caused market players to rollback some of their bets concerning further southward trading into the regional currency. Moreover, improvements into Manufacturing PMIs, released on Monday, helped the Euro to maintain its strength against GBP & USD; however, it continued being weaker against the JPY and NZD. During the current week, there are few releases scheduled from Europe except German Factory Orders; however, market focus is likely to remain centered around the UK PMI & US labor market numbers.
Given the backdrop, the following is a brief technical overview of EURUSD, EURGBP, EURJPY and EURNZD.
Reversal from the 1.1097 support level seems capped by the descending trend-channel on D1 chart of the EURUSD with 1.1400 psychological level, also the upper line of the channel, being immediate resistance for the pair. Should it successfully break the 1.1400 mark, it can immediately extend its up-move towards 1.1525 – 1.1530 resistance zone, including 23.6% Fibonacci Retracement of its October – January decline. A daily close above 1.1530, is likely followed by the 1.1650 and the 1.1770 (38.2% Fibo) resistance level. Alternatively, 1.1260 and the January low, near 1.1097, are likely near-term supports for the pair before it plunges to the lower line of the channel, near 1.0850. Moreover, a close below 1.0850 can trigger additional decline of the pair towards 1.0600 horizontal support region.
Failure to break the 100% FE of its March 2014 – January 2015 decline, triggered pullback into the EURGBP which is now targeting, 0.7580, the important support turned resistance line of the descending trend channel, stretched from July 2013. On the sustained break of 0.7580, the pair can rally towards 0.7660 mark, 61.8% FE, and can once again observe the descending trend-channel. Should the pair maintains its up-move, it can rally towards the September 2014 lows, near 0.7760. Should the pair fails to maintain its pullback, it can decline to 0.7480 and 0.7400 in an immediate southward trading. Moreover, a close below 0.7400 is likely to extend the pair’s decline towards 0.7240 horizontal support before it plunges to 0.7000 levels.
Also Watch: Weekly Overview of Major Currency Pairs
RSI pullback from the oversold region seems supporting the EURJPY from not breaking the 132.30 support and can fuel the pair towards 134.70 resistance level, marked by the 23.6% Fibonacci Retracement of its December – January decline. Further, a sustained close above 134.70 can trigger the pair’s up-move towards 137.50 – 137.55 region, including 38.2% Fibo. A break of 137.55 becomes important as it is likely to support the pair towards testing 200-day EMA & 50% Fibo near 139.80 – 139.85 region. On the downside, a break of 132.40 can force the pair towards testing 130.00 psychological support level. Given the pair’s ability to break 130, it is likely to test July 2013 lows near 128 - 127.80 support zone.
EURNZD up-move seems currently capped by the 100-day SMA, 200-day SMA and the 61.8% Fibonacci Retracement Level of its September 2013 – January 2014 decline near 1.5790 – 1.5800. If the pair successfully break the strong resistance, it can immediately rally towards 76.4% Fibo, near 1.6050 resistance level, before testing multiple resistance near 1.6200 mark. On the break of 1.6200, the September high of 1.6443 is likely to become next land mark for the pair. On the downside, the psychological support of 1.5500, quickly followed by the 1.5400, including 38.2% Fibo. A close below 1.5400 negates chances of near-term up-move by the pair and can cause it to test 1.5260 and the 1.5030 support levels.
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