The Euro traded in line with our previous analysis after the single currency ended a two-month sideways consolidation from the upside.
The break above 1.1000 psychological barrier brought a strong bullish signal, which kept our outlook bullish in the near-term.
Technically, we expect the pair to remain steady as far as prices keep trading above 1.1160 low. In the short-term, a breakdown below 1.1250 zone should signal a deeper correction before another rally to begin.
For the week ahead, we believe that the pair is likely to extend gains and can see 1.1350 level before a correction lower.
Consequently, our preference remains to the upside despite the overbought conditions seen in the hourly chart, as far as 1.1160 support level is intact.
The British pound found strong resistance from 1.4660 level, which coincide with 50% Fibonacci retracement of the recent decline from 1.5240 peak.
Looking at the wave structure of the last upside move, we can see that the correction took the form of a double three Elliott wave correction, which ended around 1.4660 level. Since then, the pair gave back half of its previous gains before to see buyers again near 1.4350 level.
As of now, the pair should trade higher to reach the daily resistance zone located between 1.4510-1.4545 levels, from where we expect heavy sellers to appear.
In sum, the med-term remains bearish in this pair as far as 1.5240 high is in place. In the opposite the short-term trend still positive above 1.4350, which keeps our view neutral for the time being.
The pair remains under pressure below 1.4100 peak and we can see further weakness in the coming hours as far as this peak is in place.
Looking the biggest time-frames, it is clear that the recent drop is seen as corrective only, and the pair is likely to bounce very soon. But in the same time, we need to wait for a clear confirmation in the hourly chart, which will come with a break above 1.4100 mark.
Otherwise, prices may remain in the correction mode for a longer time.
By now, our strategy is to wait for either a break below 1.3640 support or above 1.4100 resistance line to confirm the next move in this pair.
In sum, our view remains bullish over the med-term but looking at the near-term price action, we expect this correction to continue until we see signs of recovery in the hourly/daily charts.
Aussie bulls succeeded to protect 0.7000 psychological level for two consecutive times, which keeps the current trend neutral in the hourly chart.
Regarding the daily chart, the trend remains bearish below 0.7325 peak, while in the hourly chart 0.7216 level represents the bearish pivot and prices should find strong resistance below this level.
Consequently, we believe that the upside potential is limited in the Aussie and prices may resume the decline around 0.7110-0.7140 zone.
In the opposite, a break above 0.7216 will reverse this outlook and the pair is likely to rally to new highs.
Otherwise, bearishness is likely to dominate investors sentiment.
USD/JPY is trading around a critical zone in the weekly chart, and traders should watch carefully the price action in the next days.
From a technical standpoint, we have seen a clear slowdown in the bullish momentum, which led to a sideways consolidation for several months.
Actually, the pair has shown a potential bearish head and shoulders pattern, with the neckline sitting near 116.00 level.
Prices did an attempt to break below this neckline, which triggered an acceleration to the downside and we have seen USD/JPY falling to as low as 114.20 level during the Asian session.
By now, we believe that the pair is set for a big move to the downside, especially if we end this week below 115.00 mark.
117.50 represent the bearish hourly pivot and our view will remain bearish below this level. Next level of interest stands at 113.10 level and should some buyers before bearishness resume.
The yellow metal continued to trade higher as prices have confirmed a bullish divergence seen in the weekly RSI.
Gold remain bullish in the daily chart and prices are testing actually 1191 resistance level.
Momentum indicators are calling for further strength in gold and we should see as high as 1208$ per ounce in the coming days.
In the flipside, 1185 is considered as the near-term support and the yellow metal is likely to remain well supported above this level.
In the short-term, the resistance zone stands between 1198.50-1200.60 levels and a break above it should clear the way for another rally towards 1208.
To conclude, the trend has changed to bullish in gold and this strength is likely to persist in the coming days, as safe haven environment has emerged in the market.
The New Zealand Dollar failed to overtake 0.6750 barrier and we saw a strong rejection around this level.
Technically, the trend remains bearish in the daily chart, and we expect the pair to remain under pressure as far as 0.6750peak still intact.
In the short-term, the pair is trading near 0.6660 resistance level and we should see a reaction lower from this level.
Our view is flat currently, and we will wait for a break above 0.6660 or below 0.6560 to confirm the next leg in this pair.
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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