The Euro failed for the fourth consecutive time in a row to overtake 1.0960/85 zone as we have seen strong selling pressure near this resistance zone.
In the near-term, the trend remains neutral as far as prices keep trading between 1.0980 and 1.0800 levels. Consequently, traders should watch carefully this zone in the coming days and a break outside of this range will give us a confirmation about the next direction in this pair.
For the week ahead, and considering Friday’s close, we believe that the pair is likely to trade lower towards 1.0800 psychological support. We have seen a strong bearish engulfing candle during last Friday, reinforcing the bearish power in the hourly chart.
To conclude, the single currency should keep trading sideways as far as 1.0770 low is in place, while a break below this level will trigger an acceleration lower towards 1.0710 zone. Otherwise, our view will remain neutral.
The British pound traded in a choppy manner as bulls tried to reverse the current bearish trend.
Cable managed to reach as high as 1.4411 level, breaking above previous week highs, which stands at 1.4360. Regardless the recent upside moves, we believe that the last rally is corrective only and traders should be aware that the bearish trend may resume anytime soon.
Technically, the pair is trading sideways between 1.4400 level in the upside and 1.4170 level in the downside, and GBP/USD should see further volatility as far as prices are stuck inside this range.
Meanwhile, the pair is likely to remain under pressure as far as 1.4600 peak still intact.
Finally, we prefer to stay away from this pair in the short-term, and we will wait for a clear break below 1.4170 level to bring a confirmation that the recent recovery has ended and consequently the pair is ready for another leg lower. In the opposite, as far as this level holds, sideways consolidation is likely to persist in the next days.
The pair kept on declining during last week as mentioned in our previous technical report. The recent recovery in Oil prices has helped the commodity currencies to strengthen in the last days.
Consequently, the Canadian Dollar succeeded to bounce sending this pair below 1.4000 psychological support.
As of now, we believe that the current correction is likely to continue during the coming week and we expect the pair to keep heading south in the direction of 1.3815 level, from where we expect prices to stabilize as bulls may appear around this support.
Moreover, if we see a daily close below 1.3815, then we can see this correction extending to deeper levels that can reach as low as 1.3750.
In the meantime, we don’t see the pair below 1.3750 as the med-term trend should renew very soon.
In sum, our view remains bullish over the med-term but looking at the near-term price action, we expect this correction to continue towards the mentioned above levels before to see a strong bounce in the pair.
The Australian Dollar traded higher during last week as we have seen a strong recovery in the commodity market.
Technically, the pair showed a double bottom reversal pattern in the hourly chart near 0.6830 level and we were waiting for a break above the neckline resistance located at 0.7045 to confirm a bullish reversal in the short-term.
Effectively, prices succeeded to overtake 0.7045 peak, which automatically changed our view to bullish in the near-term.
By now, we believe that this recovery is likely to continue in the next days as far as prices keep trading above 0.7000 psychological support.
In addition, the theoretical target for this double bottom pattern stands at 0.7250 level and can be reached if the pair manage to hold 0.70 low.
Conversely and from a med-term perspective, the pair remain bearish in the daily chart as far as prices keep trading below 0.7325 peak, which keep the current outlook mixed.
USD/JPY has confirmed a bullish reversal in the hourly chart as the pair managed to overtake 118.80 highs, bringing a strong bullish signal during last week.
The pair succeeded to reach as high as 121.70 level, before to stabilize near 121.00 mark, reinforcing the probability of a trend shift in the near-term.
In the other side, 123.75 peak represent the bearish daily pivot in this pair, and we will focus on this level as a weekly close above this level will confirm that the end of recent correction and prices should trade higher towards 2015 peak in the coming weeks.
For the week ahead, traders should watch 121.90/122.00 zone as it represents the last resistance zone for this pair and bears may try to erase last week gains.
Consequently, we will watch this zone for a bearish reaction. In the opposite, a daily close above it will push prices to as high as 123.75 level.
In sum, the path is cleared for an acceleration to the upside and we expect prices to continue higher towards 121.80/122.00 zone before to see any real resistance.
This view is valid as far as 118.50 low is in place.
The yellow metal rallied to reach our daily target of 1125$. Prices extended gains to as high as 1128$ per ounce before to give back some of the weekly gains.
Gold remain bullish in the daily chart and can break above 1128 peak to reach as high as 1136-1138 levels in the coming days.
Meanwhile, we believe that the current bullish cycle which started at 1072.50 low is mature, and we expect gold to find strong resistance around 1138 level to end this bullish cycle.
In the short-term, the resistance zone stands between 1120-1123.50 levels and we can see a bearish reaction from this zone before to rally to new highs again.
To conclude, gold is bullish in the daily chart, and is likely to remain strong in the coming days, but we expect a short-term correction to begin soon.
The New Zealand Dollar traded sideways during last week after RBNZ decided to maintain the official cash rate at 2.50%.
Technically, the trend remains bearish in the daily chart, and we expect the pair to remain under pressure as far as 0.6590peak still intact.
In the short-term, the pair is trading in a range between 0.6530/40 in the upside and 0.6425 level in the downside. Consequently, our view is neutral and we prefer to wait for the pair to exit this consolidation pattern in order to confirm the next move in the Kiwi.
In extension, if we see the pair breaking above 0.6570/90 zone in a daily basis, then traders should be careful as a potential bullish reversal can be in play.
In the downside, a breach of 0.6425 low will signal a bearish trend continuation.
In sum, we prefer to stay away from the Kiwi/Dollar until we see a clear break in the next days.
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