The Euro fell into a short-term correction and reached the hourly support located at 1.1080 level. This level coincide with Friday low and keep giving some support to the single currency.
As of now, our view remains unchanged and we still believe that another leg higher is likely to happen in this pair. Meanwhile, traders should be aware that the pair might do an extended correction that can reach as low as 1.1020-1.0940 levels before the bullish trend to resume.
In the near-term 1.1070/80, continue to act as a strong support and the upside risks will remain steady unless we see a daily close below this support.
To conclude and looking at the technical picture, the pair stands in overbought levels in the near-term and should face some correction to the downside before the bullish trend resume.
The British pound traded lower as expected and the pair found strong resistance around the bearish zone mentioned in our previous report. 1.4400 level represent 50% of the recent decline seen from 1.4950 peak and we may see another wave lower in the coming hours.
Looking to the downside, the first station is 1.4250 level, followed by 1.4170 in extension. Moreover, a daily close below 1.4170 will clear the way for another sell-off in the direction of 1.4100 support zone.
The trend remains bearish in the med-term as far as the pair keep trading below 1.4660 peak, which keeps the odds to the south side. Finally, traders should focus on 1.4170 as it is expected to provide some support to the Sterling, in the other side only a close above 1.4335 will bring the bullishness back.
-Bullish reversal in focus
-Bullish divergence in RSI indicator
-Confirmation above 1.3310 looking for 1.3400 followed by 1.3450 in extension
-Invalidation below 1.3220 only
USD/CAD showed some of recovery yesterday but we still need additional momentum to confirm a bullish reversal in the near-term.
In the daily chart, the pair reached a med-term support zone, which stands between 1.3400 and 1.3110 as it represents the 50-61.8% Fibonacci retracement of the last rally seen from 1.2130 low.
In addition, the pair dropped for eight consecutive weeks in a row, which put prices in a clear oversold situation and we may see a bounce to the upside during this week.
In addition, the RSI indicator showed a bullish divergence and actually the pair is breaking above 1.3310 hourly resistance, which confirm this bullish reversal and as of now, we will look for further gains in the direction of 1.3400 psychological barrier followed by 1.3450 in extension.
In the other side, a daily close below 1.3220 will weaken this positive view.
The Aussie failed around 0.7600 psychological barrier and entered into correction mode by the time being.
As of now, the pair should continue to trade sideways to lower towards new 0.7410/0.7430 support zone, from where we will wait for bulls reaction. A daily close below this level, will confirm a deeper correction in the direction of 0.7350/40 zone while a break above 0.7525 hourly resistance, will signal the end of the actual correction.
In addition, momentum indicators turned in red, which reinforce the probability of an extended consolidation.
The pair did another attempt to break above 114.00 psychological barrier but failed as bearish pressure increased.
No clear breakout/down was seen yet in this pair and we believe that prices may continue to trade sideways until we see either a daily close above 114.25/50 zone in the upside or 112.20/112.00 levels in the downside.
Consequently, we prefer to wait for price action to develop further to confirm the next directional move in this pair. However, and when looking at the actual trading structure in the near-term, the pair slid below 113.00 level, which may be a potential bearish signal but we will wait for a break below 112.75/60 area to confirm this negative signal.
Finally, we expect a major break in this pair during this week and traders should focus on the levels mentioned above as they represents key levels in this pair.
Gold sold-off yesterday as expected after reaching a key Fibonacci level last week located at 1285$ per ounce.
This level represents the 61.8% Fibonacci retracement of the entire drop seen from 1432 peak and we may see a pause in the upside momentum this week.
Moreover, the yellow metal broke below 1237 level and opened another extension to the downside towards 1225 support level. We expect the decline to continue by now and we look for 1225 during the next hours followed by 1210 level in extension from where we expect strong buyers to appear.
In the other side, as far as 1260 peak is in place, downside risks will remain strong while a daily close above this resistance will bring the positive view again.
The New Zealand Dollar showed some signs of weakness during yesterday’s U.S trading session as 0.6800 resistance continue to act as a strong barrier in this pair.
The pair printed a series of lower highs from 0.6820 peak, we saw 0.6800 followed by 0.6775 last week. Actually, the pair is heading south and may re-test post RBNZ low, which stands at 0.6610 level.
Overall, the daily chart remains neutral and the kiwi continue to trade between 0.6800 in the upside and 0.6550 in the downside. Consequently, traders should stay away from this pair and wait for a break below 0.6610 level, which represents the hourly support in this pair before to confirm that the med-term bearishness is back.
In the flipside, a daily close above 0.6775/0.6800 zone will clear the way for a big rally in this pair.
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