We have seen big volatility in the FX Market today coupled with many false signals from a technical view.
Consequently, traders should be aware of that and have to reduce their risk exposure ahead of the weekly close.
In term of fundamentals, all eyes were turned on the U.S GDP release, which came out strongly above analysts’ expectations. Surprisingly, the GDP QoQ jumped to 1.0% up from 0.7% previously, while estimates were calling for 0.4% only.
Immediately following the release, the U.S Dollar soared and we have seen USDJPY breaking above 113.00 mark, in addition prices managed to break above the bearish trendline drawn from 114.85 peak, which is a strong bullish signal in the near-term. As of now, we expect the pair to keep heading north towards 113.90 level followed by 114.90 in extension.
Moreover, a daily close above 114.85 will confirm a double bottom reversal pattern from 111.00 lows.
Regarding the Euro, the single currency did an attempt to overtake 1.1042 resistance level and has reached as high as 1.1068 level, which coincide with the 61.8% Fibonacci retracement from 1.1140 peak and from where we saw strong sellers. Since then, the pair sold-off sharply and erased yesterday’s gains. Currently, the pair remain bearish in the short-term and as far as 1.1140 high is in place, downside risks are growing.
Cable has followed the same structure as the euro and traded higher during today’s European session. The pair rose to as high as 1.4042 level before to reverse lower as bearish pressure has resumed. Nothing has changed in our view, and the pair is clearly bearish over a short/med-term basis. Finally, we expect the pair to break below 1.3875 support seen this week, and we will maintain our negative outlook in the near-term as far as 1.4042 peak is intact.
The Aussie failed to overtake 0.7250 resistance level for the second consecutive time in a row as we have seen strong bearish reaction around this level.
Looking at the hourly chart, traders should focus on 0.7145 support zone and as far as this level holds, the view will remain positive in the short-term, while a break a breach of this support should expose the daily support at 0.7080 level.
From a med-term standpoint, AUD/USD remains negative below 0.7325/80 zone and we need a daily close above 0.7250 first, in order to confirm another rally in the pair. Otherwise, the near-term will remain neutral.
Gold continue to trade sideways between 1240 level in the upside and 1200 in the downside and as far as this situation continue, the near-term view will remain unclear.
In the hourly chart, the nearest support is located at 1222 level and a break below it will cancel the scenario of testing 1260 peak anytime soon.
In the meantime, gold remain positive in the daily chart above 1190 low and we prefer actually to stay away from it until we see a clear break of either 1240 or 1200 level.
The New Zealand Dollar has turned bullish in the hourly chart, and prices managed to print new highs above 0.6750 peak, which may signal another leg higher in the next days.
But we need to wait for a weekly close above 0.6750 to confirm this possible breakout, otherwise the neutrality will keep surrounding.
Technically, the pair was stuck between a 200 pips range between 0.6560 in the downside and 0.6750 in the upside. But looking at momentum indicators, we believe that prices are set for a bullish breakout in the next days.
In the flipside, a daily close below 0.6560 support will bring the bearishness back.
Oil has begun to show some signs of recovery in the hourly chart, and we saw prices overtaking 34.00 handle today. Meanwhile, we believe that Oil still need additional bullish momentum to confirm a reversal in the days.
In term of technical levels, we will be watching 34.75 peak as it represents the pivot in the daily chart, and a break above it will confirm an effective bullish reversal in Oil, which can lead to a rally towards 36/38$ per barrel.
As of now, it is really early to begin talking about a big reversal in oil prices, but we will focus on the coming week price action as it may be a confirmation week.
Finally, 34.75 is the level of interest in the upside, while a daily close below 31.00-30.65 will weaken this bullish outlook.
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