On Tuesday, record low UK inflation readings hurt the GBP is a bitter way that the UK Currency registered its second consecutive decline against JPY, tested more than a month’s low against CHF and decline to lowest level in two months against its Australian and New Zealand counterparts. With the CPI number already out, market players will closely examine, monthly Retail Sales figure, scheduled for release on Thursday, in order to foresee upcoming moves of the GBP.
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Having cleared the background, the following is a brief technical outlook of GBPAUD, GBPNZD, GBPJPY and GBPCHF.
Even if the GBPAUD broke its 100-day SMA on a closing basis for the first time in more than a month, the ascending trend-line, connecting the November 2014 low to the January 2015 lows, near 1.8820, coupled with the oversold RSI, could mark a reversal of the pair to its 1.9000 mark, encompassing its 100-day SMA. Given the pair’s ability to close above 1.9000 mark, the 1.9100 and the 38.2% Fibonacci Retracement of its November 2014 to February 2015 up-move, near 1.9200 mark, could restrict near-term up-move of the pair. A sustained break of 1.9200 mark negates the chances of pair’s near-term decline and could fuel the pair towards surpassing 1.9400 mark. On the downside, a break of 1.8820 could immediately challenge 61.8% Fibo, near 1.8700 mark, before testing multiple supports near 1.8550, 1.8500 and 76.4% Fibo. near 1.8350. Given the pair’s ability to break 1.8350, it becomes vulnerable to plunge towards testing 1.8200 support.
Although, GBPNZD tests the lowest level in more than two months, and test the ascending trend-line support, stretched from July 2013, coupled with the 50% Fibonacci Retracement of its 2013 lows to 2014 highs, near 1.9350, could restrict further decline of the pair. A close above 1.9350 could make the pair test 1.9600 immediate resistance before rallying to 38.2% Fibo, near 1.9780. Further, a break of 1.9780 could fuel the pair’s surge towards surpassing 2.0000 psychological magnet. Alternatively, a break of 1.9350 could force the pair to immediately test 1.9200 mark before testing 1.9050 and the 61.8% Fibo, near 1.8950. A sustained break of 1.8950 could become detrimental for the pair’s up-move and is likely making ground for the 1.8750 re-test.
As with the GBPAUD and GBPNZD, the GBPJPY has also broke its SMA, the 200-day SMA, and is supported by the ascending trend-line, near 177.60, to register further declines. Should the pair closes below 177.60, it can immediately test the 61.8% Fibonacci Retracement of its October – December 2014 up-move, near 176.30. Further, a break of 176.30 is followed by the 175.40 and the 174.50 support levels. On the upside, the 50% Fibo., near 178.80, could become immediate resistance for the pair before it rallied to 179.50 and the 181.50, encompassing 38.2% Fibo. Extended up-move beyond 181.50 could be restricted by the descending trend-line resistance, connecting late December highs to February highs, near 183.80. A break of 183.80 could fuel the pair towards surpassing 186 level; however, 184.50, 23.6% Fibo, could become intermediate resistance for the pair.
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Having failed to sustain the break of 1.4970 horizontal mark, the GBPCHF observed staggered decline, forming descending trend-channel on its H4 timeframe. The 1.4190 horizontal mark seems restricting immediate decline by the pair while the 1.4340 and the trend channel resistance, near 1.4460 are likely strong resistance to limit the pair’s near-term up-move. Should the pair breaks 1.4460 on a closing basis, the 1.4530 and the 1.4630, including 23.6% Fibonacci Retracement of its post-SNB up-move, could restrict the pair’s medium-term up-move. However, a break of 1.4190 could force the pair to test channel support, near 1.4120 and an extended decline below 1.4120 can target 1.3990 support, 50% Fibo. on the downside, which is likely strong support for the medium-term GBPCHF trading.
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