This has been a relatively quiet week in regards to news. There were some key decisions such as the RBNZ rate statement and MPC Official Bank rates but overall it felt like the markets were digesting the events of the week before.
Today an array of PMI data were released which all came out negative. French flash manufacturing came out at 49.6 whilst German 51.5. Both being short of the forecast, the EUR weakened across the board. This weakness may linger on throughout the day.
As discussed in yesterday’s report, the EURUSD is indeed bearish. The main driver is no longer the situation with the EUR but the strength of the USD. The daily timeframe remains bearish as long as prices keep below the 1.104 level which proved quite sticky in the months of June. Prices currently remain under the 20 SMA and back below the weekly pivot. A daily close below 1.0920 will open a further path to the monthly S1 of 1.0875. Once a breakdown below 1.08750 is confirmed, the new lower high becomes 1.1015.
Intraday – The weak PMI release helped EUR intraday bears. There was a breakdown below the 1.0960 intraday support. Most technical indicators do suggest a further decline later on today. Previous support at 1.0960 may become resistance with targets of the daily S1 of 1.0930. A move an hourly close back above 1.1000 invalidates this intraday bearish view.
Yesterday’s weak GBP and strong USD was the perfect combination to unlock the bearish move seen in the late part of the session. The breakdown below 1.5500 which was discussed, in fact, did materialise and now prices have hit the weekly S1. On the daily time frame, things are turning more and more bearish. Not only was there a bearish engulfment but now prices reside below the weekly and monthly pivot. We are currently below the 20 SMA in addition to the MACD trading down. A correction seems like a healthy alternative before a potential move lower. 1.5650 remains as the trend defining level for bears to keep control.
Intraday – There was a classic London session breakdown around 8 am on the GBPUSD. Prices breached the 1.5500 intraday support. Previous support may become resistance which may help for a move to the daily S1 of 1.5450. A move back above 1.5535 invalidates this intraday bearish view.
AUDUSD had an interesting week. The pair has been slowly sinking deeper with each passing day. Gold weakness in addition to the dollar strength has helped the AUDUSD bears hit the 0.7300 level which was a sticky region back in early 2009. As long as the value of Gold keeps dropping and US dollar increasing, I remain bearish on the AUDUSD. The daily timeframe is bearish and a solid weekly close below 0.7300 may open doors to 0.7000. This was support back in April 2009. The trend defining level is 0.7450 so traders may be looking to take advantage of a potential correction or simply a breakout.
Intraday – This is bearish on the hourly. The steep decline in the Asian sessions was caused by the negative PMI results in China. Prices crashed through the daily S2 and have been hovering around the 0.7300 regions for some time now. As discussed previously, prices stay within the R2 and S2 most of the time. On the back of this, I remain an observer on the AUDUSD until the US session start.
The USDJPY has been a passive. Yesterday’s daily spinning top candle suggested the indecision the pair currently extrudes. It looks like a range has been formed with resistance at 124.50 and support at 123.50. A potential breakout opportunity may be on the table.
Intraday – Prices are looking quite indecisive also on the hourly timeframe. Even though the pair trades above the daily pivot, there is an obvious level of resistance around 124.15. A solid hourly close above this level may open doors back to the 124.50 larger resistance.
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