IKOFX Daily Market Analysis

[team.ikofx]

Bears Remain In Control For GBPUSD

The British pound opened this week lower against the US dollar and it looks like that the bearish bias is here to stay for the GBPUSD pair. The GBPUSD pair traded below the last week low and traded towards the 1.5925 level. It managed to find buyers around the mentioned level and climbed back higher. However, the pair remains under pressure and it is very likely that any corrections will be sold in the short term. We need to see how the economic releases in the coming days in the UK and the US affect the pair. There are several important risk events lined up moving ahead this week.

There is a critical sliding channel formed on the hourly chart of the GBPUSD pair, which acted as support for the pair recently around the 1.5924 low. There is a chance that the pair might correct a bit higher from the current levels. However, if it does so, then rallies towards the 1.5980 level could be seen as a selling opportunity. The mentioned level coincides with the 50% fib level of the last leg from the 1.6037 high to 1.5924 low. So, the 1.5980 level might act as a monster hurdle for the pair in the short term. The hourly RSI is also below the 50 level, which can be seen as a bearish sign for the pair.

Alternatively, if the pair continues to move lower, then we need to see whether it can hold the channel support area or not. A break below the same could take the pair towards the 1.5880 level.

Overall, one might consider selling rallies around the 1.5980 resistance area.

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[team.ikofx]

RBA Likely To Push Aussie Dollar Further

The Aussie dollar was seen trading lower against the US dollar during the Asian session, as there were several important releases lined up. The Australian retail sales and trade balance data was published. One came as a disappointment and another one exceeded the expectation. However, the AUDUSD pair was seen trading lower towards the 0.8650 support area. There is one very important release lined up in a few hours. The RBA will announce interest rates later during the Asian session. There is a chance that the pair might dive further after the release. So, one need to be very careful as swing moves are likely around the rate decision release.

There was a crucial bullish trend line formed on the hourly chart of the AUDUSD pair, which was broken recently. The down-move in the AUDUSD pair was swift once it broke the mentioned bullish trend line. The pair today traded as low as 0.8644 where is somehow managed to find a few buyers and currently correcting higher ahead of the RBA interest rate decision. There is a chance that the pair might correct towards the 38.2% or 50% fib retracement level of the last drop from the 0.8910 high to 0.8644 low. However, if it corrects higher from the current levels, then it is likely to find sellers as the market sentiment is still bearish for the pair.

Alternatively, there is a possibility that the pair might not correct higher much and move lower moving ahead. In that situation, the last low of 0.8644 could be tested again.

Overall, one might consider selling rallies around the 50% fib retracement level.

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[team.ikofx]

Euro Finally Getting Some Bids

The Euro was seen trading higher against the US dollar and the British pound. The main reason for this was all the drama going on whether the ECB will introduce QE in the coming month or not. The EURGBP pair traded above a critical resistance area recently, which has opened the doors for more upside in the short term. The UK services PMI is a major risk event coming up, which has the potential to cause a lot of moves in the GBPUSD and EURGBP pair. If the outcome somehow disappoints, then the EURGBP pair might catch a few more bids in the short term. There are releases in the Euro zone as well to add to the volatility.

There was a crucial ascending channel formed on the hourly chart of the EURGBP pair, which was breached recently. After the break, the pair traded towards the 100 hourly moving average and is currently struggling to clear the same. It is important to note that the upside stalled around the 50% fib retracement level of the last leg from the 0.7911 high to 0.7787 low. So, there is a chance of a move lower, but the broken channel resistance might come into play in that situation. It might act as a support for the pair. If somehow the pair manages to catch a few bids, then it might climb towards the 200 hourly moving average.

If the data in the UK come out positive, then there is possibility that the pair might move below the 0.7835 support area.

Overall, one might consider buying dips as long as the pair stays above the 0.7830 support area.

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[team.ikofx]

No Mercy For USDJPY

The US dollar has climbed more than 300 pips recently against the Japanese yen as the latter one continues to decline against almost all major currencies. The economic releases in the US were impressive. A recent example was the US ADP employment change data, which came in at 230K, which was a lot better than the expectation. The US dollar is trading higher against the Japanese yen after the release and looks set for more gains in the short term. The USDJPY pair is testing the highs again as of writing and if manages to clear it, then a move towards the 115.00 level would be on the cards.

There is a triangle formed on the hourly chart of the USDJPY pair, which has a resistance around the last high. The pair is currently heading higher and looks set for a test of the triangle upper trend line. Recently, the pair fell a bit lower, but found support around the 23.6% fib retracement level of the last leg from the 113.15 low to 114.83 high. So, there is a chance that the pair might break the last high and gain more moving ahead. However, the 115.00 level represents a major resistance zone for the pair and could affect it to a great extent. We need to see how the pair reacts around the mentioned level if reached in the short term.

Alternatively, if the pair moves lower from the current levels, then it would create the case of a double top which might call for at least 50-80 pips correction moving ahead.

Overall, staying on the sidelines would be wise considering the current levels in the pair.

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[team.ikofx]

EURUSD Down and Out

The Euro was simply trashed yesterday against the US dollar, as the ECB interest rate decision and press conference ignited a bear rally in the EURUSD pair. The ECB President mentioned that the central bank might consider more measures if required in the near term, which means he somehow signalled that there can be QE moving ahead. The Euro sellers were waiting for the same, and ignited a down-move in the EURUSD pair. The pair fell below the 1.2400 level and might be heading lower in the short term. There is a major risk event lined up during the NY session today, which is likely to cause more upside in the US dollar.

There was an important bullish trend line formed on the hourly chart of the EURUSD pair, which was breached after the ECB release. The pair fell as low as 1.2363 earlier during the Asian session. There is no hope for a correction in the EURUSD pair as the Euro sellers are not willing to give up. The hourly RSI is around the oversold readings, which presents a minor chance of a correction towards the 1.2410-20 levels where it is likely to find 23.6% fib retracement level of the last drop from the 1.2532 high. Let us see how the Euro sellers react around the mentioned level if reached moving ahead.

Alternatively, there is a possibility that the EURUSD pair might not correct higher and continue to move lower. In that situation, a test of the 1.2320 level is possible.

Overall, one might consider selling rallies as long as the pair is below the 100 MA.

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[team.ikofx]

GBPUSD Has More Room Towards Upside

The British pound created new low during this past week against the US dollar after the economic releases in the US. However, it managed to find buyers around lower levels and later jumped higher to close the week above the 1.5820 level. This week the GBPUSD pair opened on the positive note and traded a touch higher towards the 1.5880 level. It faces a minor resistance on the way up and we need to see how the pair behaves during the coming sessions. If the pair moves lower from here, then there are chances that the British pound buyers might protect the downside.

There is a major support trend line on the hourly chart of the GBPUSD pair, which might protect the downside in the pair if it moves lower again. Currently, the pair is testing the 38.2% fib retracement level of the last drop from the 1.6009 high to 1.5801 low. So, there is a possibility that the pair might correct a bit lower from here. However, the downside should be limited as the pair looks like is forming a short-term bottom. There is no denial that there are resistances towards the upside, but the pair has a tendency to clear them when it continues to trade higher in the short to medium term.

On the other hand, if the GBPUSD pair moves lower from the current levels, then it might find bids around the 1.5810-20 levels, which could act as a pivot area for the pair.

Overall, one might consider buying around the mentioned levels as long as the pair is trading above the last low.

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[team.ikofx]

AUDUSD Trying To Recover Ground

The Australian dollar has managed to find buyers against the US dollar recently, as it has breached an important resistance area. The Australian house price index was released during the Asian session, which came a touch lower from the last reading of 10.1% to 9.1%. The AUDUSD pair traded higher mostly in Asia. We need to see whether the pair can manage to gain momentum in the short term or not. There is a chance of a recovery, but the Aussie buyers need more reasons for it to take higher moving ahead.

There was an important bearish trend line formed on the hourly chart of the AUDUSD pair, which was broken recently. This break has opened the doors for more upside in the pair. One important point here is that after the break, the pair retested the broken trend line and is currently bouncing again. It is now heading towards the 38.2% fib retracement level of the last leg from the 0.8911 high to 0.8539 low. However, there is a major hurdle sitting around the mentioned fib level in the form of 200 hourly moving average. There is a possibility that the AUDUSD pair might struggle around the 0.8680 level in the near term as there is a major resistance and sellers could appear to protect the upside in the pair.

Let us see how the pair trades moving ahead. There is even a chance that the pair might move back lower and retest the broken trend line.

Overall, one might consider selling rallies around the 200 MA as long as it trades below the same.

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[team.ikofx]

EURGBP Looks Set For A Break Lower

The Euro has struggled a lot recently against the British pound and every time it has marched higher sellers stopped the rally. The EURGBP pair is testing an important support area, which if breached might call for more losses in the short term. There are some major releases in the UK today, including the UK employment change and the unemployment rate. The UK unemployment rate is expected to fall from 6% to 5.9%. Let us see how the British pound behaves after the release and whether it gains of losses ground against major currencies.

There is an important bullish trend line formed on the hourly chart of the EURGBP pair, which is protecting the downside in the pair. However, it has now closed below the 100 and 200 hourly moving average, which might ignite bearish pressure on the EURGBP pair. The hourly RSI has closed below the 50 mark, which is one more bearish development. The pair has even settled below the 50% fib retracement level of the last leg from the 0.7800 low to 0.7860 high. So, if the pair manages to clear the mentioned trend line and settles below the same, then it might head back towards the last swing low of 0.7786.

Alternatively, if at all the pair manages to gain bids and climb higher, then the 200 hourly moving average might act as a hurdle towards the upside. Only a break above the same would call for more gains in the near term.

Overall, one might consider selling with a break below the highlighted trend line as long as the pair is above 200 MA.

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[team.ikofx]

Can USDJPY Fill The Gap?

The US dollar traded higher against the Japanese yen recently, as there was no major correction noticed in the USDJPY pair. However, we must not forget that there is an opening week gap around the 112.50 levels, which might act as a magnet for the pair in the short term. Selling rallies is not a good option in the USDJPY pair for now, but if any bearish signs emerge on the charts, then we might consider entering into a sell trade. Fundamentally, there is no major release in the US, which might create ranging moves in the near term.

There is a critical bullish trend line formed on the hourly chart of the USDJPY pair, which might act a as a signal for a correction in the pair. If the pair somehow manages to break the mentioned trend line, then there is a chance of a move towards the gap fill level. However, the trend line support area is a monster one, as it is aligned with the 100 hourly moving average. Moreover, the 23.6% fib retracement level of the last leg from the 111.44 low to 116.09 high is also sitting around the same area, which acted as a support for the pair recently. The pair needs to break the mentioned support area for more losses in the near term.

Alternatively, if the USDJPY pair continues to move higher, then it might challenge the last high of 116.09 moving ahead. A break and close above the same might call for a move towards 116.50.

Overall, one might consider selling with a break below the highlighted trend line support area.

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[team.ikofx]

Break Certain In EURUSD

The Euro somehow managed to hold the gains yesterday against the US dollar after a few important releases in the Euro zone. Today, there are again major releases lined up in the Euro zone, which might impact the Euro in the short term. The most important ones to keep an eye are the Euro area inflation data and GDP data. Any major miss in the outcome might create a lot of selling pressure, and on the other hand, any better than expected reading might help the Euro to recover some ground Intraday. There is a crucial pattern forming which might lead to a break in the near term.

There is a monster contracting triangle formed on the hourly chart of the EURUSD pair, which might act as a catalyst for the pair moving ahead. A breakout technically is aligning perfectly with major economic releases. There is one important bullish sign which can be noted from the charts, which the fact that the pair is currently trading above the 100 hourly moving average. The mentioned MA is aligning with the triangle support area. So, the Euro sellers might find it hard to break the 1.2440 support area. Only a major miss in the releases might cause a break in the EURUSD pair. A break below could take the pair towards the last low of 1.2417 at least.

On the upside, the triangle resistance area is the only hurdle for the EURUSD pair. If the pair breaks higher and settles above the same, then it can gain more Intraday.

Overall, one might consider buying or selling with a break of the triangle in the short term.

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[team.ikofx]

Can GBPUSD Jump Higher?

The British pound suffered heavy losses against the US dollar this past week, and it looks like there is a chance of a correction in the short term. However, we need to see some important signs of a correction before we can plan for a trade. There are again several important releases lined up during this week in the UK, which might ignite swing moves in the GBPUSD pair. We need to see how the outcome shapes and affects the GBPUSD pair in the near term. If the reports are somehow positive then there is a chance of a retracement in the GBPUSD pair.

There is a breakout pattern forming on the hourly chart of the GBPUSD pair, which might provide bulls a reason to take it higher from the current levels. There is a minor inverse head and shoulders pattern forming, which has a neckline around the 1.5700 level. The pair is currently testing the mentioned area and struggling to beak it. We need to see whether it can manage to break it or not. A break and close above the same might call for more gains in the GBPUSD pair, which could take it towards the 100 hourly moving average. The mentioned moving average is sitting just around the 50% fib retracement level of the last drop from the 1.5939 high to 1.5591 low.

Alternatively, if the GBPUSD pair fails to break higher and moves lower again, then it might head back towards the 1.5600 support area in the near term.

Overall, one might consider buying with a break of the pattern in the short term.

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[team.ikofx]

Aussie Likely To Continue Trading Higher

The Aussie dollar has shown a lot of resiliency recently against the US dollar, as despite so much of bearish pressure it has managed to hold the ground. The RBA meeting minutes were scheduled for release earlier during the Asian session. There was nothing new in the minutes, which could have affected the AUDUSD pair to a great extent. That is the reason why the Aussie dollar is still trading above an important support area. There is one more important event lined up in a few hours i.e. the RBA Governor Stevens will be delivering a speech. Let us whether the pair moves during the mentioned risk event.

There is a critical bullish trend line formed on the hourly chart of the AUDUSD pair, which might act as a catalyst for the pair. There is a minor bearish development as the pair recently closed below the 100 hourly moving average and currently struggling to break above the same. However, the best part is that the pair managed to hold the mentioned bullish trend line. So, there is a chance of a move higher in the near term. The pair might climb towards the 50% fib retracement level of the last drop from the 0.8794 high to 0.8694 low. We need to see how the Aussie dollar sellers react around the mentioned fib level.

If the bearish pressure increases on the AUDUSD pair, then there is a chance that the pair might break the highlighted bullish trend line and move lower.

Overall, one might consider buying dips as long as the highlighted trend line holds.

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[team.ikofx]

Euro To Correct Lower Against British Pound

The Euro was seen trading higher against the British pound recently as the latter one weakened a lot against most major currencies. However, the EURGBP is facing a minor resistance in the short term, which might push the pair lower. A correction is also due, which could be again seen as a buying opportunity. There were a couple of releases in the Euro zone yesterday. All reports were positive and lifted the Euro to a certain extent. Today, there are some releases in the UK as well, which might ignite swing moves in the EURGBP pair.

There was a crucial bearish trend line formed on the hourly chart of the EURGBP pair, which is currently acting as a resistance for the pair. The pair is currently consolidating in a tiny range of 10 pips and sitting just below the mentioned trend line. There is a chance of a spike lower, which might take the pair towards the 38.2% fib retracement level of the last leg from the 0.7953 low to 0.8022 high. Any further losses could take the pair towards the 50% fib level where buyers might appear to protect the downside in the pair. The hourly RSI is also around the extreme levels raising the case of a correction in the near term.

On the other hand, if the EURGBP pair breaks the highlighted trend line and close above the same, then it might challenge the 0.8050 level moving ahead. An important bullish sign is that the pair is trading above a key support area.

Overall, one might consider buying dips as long as the 50% fib level holds.

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[team.ikofx]

USDJPY Breaks A Monster Resistance; Eyes 118.50

The US dollar traded higher against the Japanese yen and broke an important resistance area yesterday. The USDJPY buyers have shown no mercy as the pair continued to trade higher with almost no major correction. We need to see how long this can continue. The FOMC meeting minutes were somehow positive for the US dollar as a few other pairs such as USDCHF dived yesterday, but later managed to recover most ground. The Japanese trade balance data was also released earlier during the Asian session. The outcome was not that bad, but the Japanese yen continued its decline against most major currencies.

There was a monster trend line formed on the hourly chart of the USDJPY pair, which was protecting the upside in the pair. It was breached recently, which might ignite more gains in the pair moving ahead. There is a chance of a minor correction from the current levels, as the hourly RSI is around the extreme levels. If the USDJPY pair corrects lower, then the broken trend line might act as a support. Any further downside should see buyers around the 23.6% fib retracement level of the last leg from the 116.32 low to 118.25 high. A break below the mentioned level looks tough as the market sentiment is still bullish for the pair.

On the upside, the last swing high of 118.25 level might continue to act as a resistance for the USDJPY pair. A break above the same might call for more gains towards the 118.50 level.

Overall, one might consider buying dips as long as the 117.50 level holds.

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[team.ikofx]

EURUSD Looks Like Gaining Momentum For Upside

The Euro was recently seen trading higher against the US dollar, and despite bad manufacturing and services PMI released in the Euro zone it climbed higher. This points that the Euro sellers are exhausted and there is a chance of a recovery in the EURUSD pair. However, there is an important point to note, which is the fact that the pair has also struggled to break higher and settle above the key resistances. So, we need to see how the pair reacts in the coming sessions. There is a strong possibility that the pair might consolidate for some time before marching higher in the short term.

There is an important bullish trend line formed on the hourly chart of the EURUSD pair, which is likely to provide support on the downside moving ahead. The most crucial thing to note is that the 100 hourly moving average is right around the mentioned trend line, which increases the importance of the trend line. If the pair corrects lower from the current levels, then it might find buyers around the 1.2520 area. A break below the highlighted trend line might be bearish for the pair, which could easily take it towards the 200 hourly moving average in the near term. The hourly RSI is now above the 50 level, which is a bullish sign as of writing.

On the upside, initial resistance can be seen around the 1.2565 level, followed by the last swing high of 1.2599. A break above the mentioned level could take the pair towards the 1.2640 area.

Overall, one might consider buying dips as long as the 100 MA holds.

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[team.ikofx]

British Pound Might Continue To Struggle

The British pound consolidated in a range against the US dollar this past week, and traded with a more or less bearish tone. We need to see how the GBPUSD pair trades during this week, and whether it can overcome the bearish pressure or not. There are some key releases lined up this week in the UK and the US, which might impact the GBPUSD pair in the near term. The pair is currently struggling to break an important resistance area. If it somehow manages to break it and trade above it then there are chances of the pair trading higher moving ahead.

There is a critical bearish trend line formed on the hourly chart of the GBPUSD pair, which has acted as a resistance on a number of times. The pair is again heading towards the mentioned trend line. The most important and worrying point to note from the charts is the fact that the 100 hourly moving average is also sitting around the mentioned trend line. So, there is a high probability that the pair might struggle around the 1.5660-80 area. Only a break above the same might call for more gains in the near term. In that situation, the next target could be around the 1.5710-20 area, which is again an important hurdle for the pair.

On the downside, initial support is around the last swing low of 1.5624, followed by the last low around the 1.5580 area. The hourly RSI is below the 50 level, which is another bearish sign.

Overall, one might consider selling rallies as long as the pair is trading below the 100 MA.

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[team.ikofx]

Aussie Dollar Struggling To Hold Ground Against Greenback

The Aussie dollar traded lower against the US dollar recently, and broke an important support area around the 0.8620 levels. This particular break has put a lot of pressure on the Aussie dollar buyers and it looks like that the AUDUSD pair might continue trading lower in the near term. There was no major release lined up during the Asian session in Australia, but the FX market sentiment was favouring the Aussie dollar sellers. As a result, the AUDUSD pair was seen trading lower towards the 0.8560 support area. We need to see how the pair trades during the coming sessions as pressure mounts in the near term.

There was a critical short-term bullish trend line formed on the hourly chart of the AUDUSD pair, which was breached recently. The most important point is the fact that the pair is now trading below the 100 and 200 hourly moving averages, which is a strong bearish sign. If we connect the last two swing lows, then the pair will meet a possible trend line around the 0.8770 level where there is a chance that the Aussie buyers might try to protect the downside in the pair. There is a possibility of a spike higher from the current levels towards the broken trend line, which might act as a resistance moving ahead.

On the downside, initial support is around the next possible bullish trend line, followed by the last swing low of 0.8560. The hourly RSI is around the extreme levels raising the case of a correction in the short term.

Overall, one might consider selling rallies as long as the pair is trading below the broken trend line.

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[team.ikofx]

Euro Facing A Major Hurdle Against British Pound

The Euro somehow managed to slowly grind higher against the British pound, but buyers need to be very careful as the EURGBP pair is heading towards an important resistance area in the short term. We need to see whether the pair can manage to break higher or not. If it somehow manages to break the resistance, then there is a chance of a bullish scenario to develop. There is a major economic release lined up during the London session, which might ignite a break in the pair. The UK GPD data will be published, which has a potential to cause a break in the EURGBP pair in the near term.

There is a critical bearish trend line formed on the hourly chart of the EURGBP pair, which might act as a catalyst for the pair moving ahead. The pair is slowly heading towards the mentioned trend line. The most important point is that the same trend line is coinciding with the 100 hourly moving average. There is a chance that the pair might struggle around the 0.7850 levels, but if the sellers fail to defend the mentioned area, then it might head towards the 0.8000 handle. Any further gains should be limited as there is still a lot of bearish pressure looming on the Euro in the near term which could protect any major gains in the pair.

On the downside, there is one more trend line which is acting as a support as of writing. A break below the same might call for more losses moving ahead.

Overall, one might consider buying with a break above the trend line as long as the pair is trading above the 0.7920 level.

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[team.ikofx]

USDJPY Forming A Breakout Pattern

The US dollar traded lower recently against a basket of currencies, including the Euro, the British pound and the Japanese yen. The most important point here is that the USDJPY pair is forming a breakout pattern on the hourly chart, which is likely to act as a catalyst for the pair in the near term. The economic releases in the US like the initial jobless claims released recently failed to match the expectation of the market, and ignited a move lower in the US dollar. One of the other best performers against the US dollar was the British pound.

There is a critical descending triangle formed on the hourly chart of the USDJPY pair, which might pave the way for more upside in the near term. Currently, the pair is testing a critical support area in the form of the 200 hourly moving average. The highlighted triangle is a contracting one and is on the verge of a breakout. There is a chance that the pair might climb higher from the current levels, and break the mentioned triangle. We need to see important bullish signs before jumping into any kind of position. However, there is an important resistance just above the triangle resistance area, as the 100 hourly moving average is siting above it. The hourly RSI is below the 50 mark, which is a bearish sign in the short term.

On the downside, the USDJPY pair might find support around the last swing low of 117.37 level. A break lower could take it towards the 116.80 area.

Overall, one might consider buying with a break above the triangle as long as the pair is trading above the 100 MA.

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[team.ikofx]

Euro Headed Lower Again

The Euro was seen struggling against the US dollar recently. One of the main reasons behind this was the poor economic releases’ outcome in the Euro zone. The most important one was the German consumer price index, which missed the expectation and ignited a down-move in the EURUSD pair. The EURUSD pair also broke an important support area, which is likely to encourage the Euro sellers in the short term. There are again a few important releases in the Euro area, including the German retail sales and the Euro area consumer price index. We need to see how the pair trades around the mentioned events.

There was a monster bullish trend line formed on the hourly chart of the EURUSD pair, which was breached recently. This break might take the pair further lower, as there is a lot of bearish pressure on the pair. Currently, the pair is trading around the 50% fib retracement level of the last leg from the 1.2360 low to 1.2530 high, which is acting as a support. Moreover, the 100 hourly moving average is also around the mentioned fib level. The hourly RSI also around the extreme levels. So, there is a possibility that the pair might bounce a little from the current levels. However, in that situation, the EURUSD pair might struggle around the broken trend line.

On the downside, a break below the 100 hourly moving average could ignite more losses in the pair, which might take it towards the 1.2400 support area.

Overall, one might consider selling rallies around the broken trend line as long as the pair is trading below the 200 MA.

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Posted By IKOFX Technical Team: Online Forex Broker