The Euro continue to trade in a tight range as 1.1070 support keep acting as a strong support in the near-term.
For today, we will watch this support level in the downside, while 1.1135 should be on focus regarding the upside. A break above or below one of those levels will give us the next direction in this pair ahead of FOMC rate decision later today.
Actually, 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.
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 turned lower from 1.4400 psychological barrier and fell sharply yesterday after breaking through key support levels. The Sterling broke below 1.4170 level and extended its weakness below 1.4100 support, which confirm the change in the short-term trend.
As of now, the pair is heading towards a major support zone, which stands between 1.4060/1.4030 levels and from where we expect a bullish reaction to occur. In addition, the pair is likely to see additional volatility as UK chancellor Osborne makes budget speech to parliament.
Regarding the med-term, the trend remains bearish as far as the pair keep trading below 1.4660 peak, which keeps the odds to the south side. Finally, traders should focus on 1.4060/30 zone as it is expected to provide strong support to the Sterling.
In the other side, only a daily close above 1.4197 peak will change this bearish outlook.
The pair confirmed a bullish reversal yesterday as prices managed to overtake 1.3310 hourly resistance and ended the day with strong gains.
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. Currently, the pair is testing a strong resistance located at 1.3400 level and we will wait for an hourly close above this level to confirm another extension higher in the direction of 1.3450 level.
In the flipside, 1.3340 represent the hourly support in this pair and prices may remain steady above this level.
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 keep fighting for a clear direction and we expect the volatility to increase in this pair ahead of FOMC rate decision later today. We believe that the pair is set for a major breakout today and consequently, traders should focus on the key technical levels for today.
It is important to note that 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.
In the meantime, and looking at the current price action, we believe that the pair has more chances for a bullish breakout as the double bottom pattern seen at 111.00 level remains valid. In addition, the pair remains oversold in the daily chart, while in the hourly chart prices keep printing higher lows. Since the double bottom at 111.00, we saw another one at 112.20 level followed by a third one around 112.60 level during yesterday.
For all these reasons, we will stick to a slightly bullish outlook in this pair, while the confirmation should come with a daily close above 114.50 level as mentioned above.
Gold remains under pressure in the short-term after reaching a key Fibonacci level last week located at 1285$ per ounce.
Technically, the yellow metal broke below 1237 level and opened another extension to the downside towards 1225 support level. Yesterday prices reached this daily support and found strong demand as expect. As for today, gold can extend its weakness in the direction of 1212$ per ounce from where we expect a bounce to happen.
In sum, our view is neutral by now as prices reached the daily support zone between 1225 and 1212 levels. Consequently, chasing the weakness from the current levels seems not a wise choice. We prefer to wait for the bullish reaction around this zone before to confirm a potential turn in the positive territory again; otherwise, another leg lower may be possible in the direction of 1200 psychological support.
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 the daily support, which stands at 0.6550 level especially after we saw a slide under post-RBNZ low located at 0.6610.
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 0.6550 level, which represents the daily 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.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.