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IronFX Essential Intraday Comment | 24/06/2015

• The dollar traded lower against almost all of its G10 peers during the European morning Wednesday, ranging from -0.3% against NOK to -0.46% vs SEK. The greenback was virtually unchanged against JPY.

• The only noteworthy release we had so far was the German Ifo survey for June. All three indices missed expectations and were lower, in line with the weak ZEW indices released last week but in contrast to the improved German preliminary manufacturing and service-sector PMIs released Tuesday. The poor Ifo survey diminished hopes that Germany, Eurozone’s growth engine, has resumed its recovery path. Despite the soft data, EUR/USD moved higher to challenge our 1.1230 resistance line. A decisive break of that hurdle could push the pair higher, perhaps towards the round figure of 1.1300.

EUR/GBP found support at 0.7080 (S1) and the lower boundary of the downslope channel and traded somewhat higher during the European morning Wednesday. Following the fall below the double top formation on the 12th of June, the price structure has been lower highs and lower lows. Therefore I believe that the short-term path remains to the downside. However, the inability of the bears to push the rate below 0.7055 (S2), brings into question their strength.

• Looking at our momentum signs, the RSI found support at its 30 line and rebounded somewhat, while the MACD has bottomed and seems ready to cross its trigger line. These momentum signs support the weakness of the decline and amplify the case that the next wave is likely to be to the upside. A test of the crossroad of the 0.7130 (R1) and the upper boundary of the channel could be on the cards. On the daily chart, the pair has been trading in a non-trending mode since mid-March. Therefore, I would consider the overall outlook to be neutral.

• Support: 0.7080 (S1), 0.7055 (S2), 0.7000 (S3)

• Resistance: 0.7130 (R1) 0.7180 (R2), 0.7210 (R3)

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