Short term chart analysis for the euro, yen, cable, loonie, aussie and the Kiwi against the USD. Potential scenarios and key support and resistance levels to watch for the pairs.
The EURUSD maintained the bearish trend, extending the downside below the targets mentioned in the prior chart analysis post.
The pair is trading below the 61.8 percent Fibonacci retracement for the overall bullish wave A-B. Few days ago, the price formed a dragonfly doji bullish reversal candlestick at the 61.8 level, but failed to sustain the upside rebound and broke below the candle’s low yesterday. Indicating strong bearish momentum.
Technically, the downside bias is dominant and may extend, approaching a potential support area around 1.1150.
Short term resistance levels that may halt any upside pullback reside at 1.1265 and 1.1300. Only a break back above 1.1365 would signal a retest of 1.1500 level again.
The price has hit the key long term resistance area again, around 115.00. I warned of this resistance in my previous chart analysis post.
Although we remain in a 1-year long upside trend, we are trading at the top of a longer term sideways range. And so long as the price remains below the resistance of this range, the possibility of a downside pullback is present. As it also coincide with the 78.6 Fibonacci retracement level for the overall major A-B wave. Stochastic is showing bearish divergence as well as the price makes new highs and the indicator fails to confirm.
If the price manages to break and hold above 115.00 then most importantly 115.60, we will probably see a retest of areas near 118.60 major long term swing high(point A)
For now, we may continue to trade sideways below 115.60, With first key support at 113.60 and 112.75.
The overall structure of lower highs starting from point B remains intact. That keeps the bearish trend started from point A in place. As the price attempts towards the long term 200-days simple moving average few weeks ago were rejected, placing a new lower swing high.
Although we are trading in a bearish trend structure, upside pullbacks has been sharp, and may continue to be so. Hence, If we see a bullish bounce with a break above 1.3510, we may retest the falling trend line for the descending channel again.
The break below the shaded support region around 1.3500 is a negative sign and keeps the bearish bias favored.
Next downside targets start at the 1.271 extension level for the most recent upside pullback around 1.3300, followed by 1.3150-1.3200 region.
The technical bias has turned bullish as the price failed to hold below 1.2500 resistance area around the 200-days simple moving average I mentioned in my prior chart analysis.
1.2600 resistance turned support now should limit any downside pullback, with next target at 1.2775-1.2810 next resistance area. Above 1.2810, 1.2900 is the next potential resistance level. While below 1.2600, we may see a retest of 1.2500 support.
AUDUSD reversed from the key juncture and confluence of multiple technical levels I empathized in my prior chart analysis. The 200-days SMA and a main horizontal resistance areas shaded on chart.
The downside reversal has been significant, but continues to maintain the same behavior of sharp upside and downside waves we have seen since point B. The breakout below the rising trend line and the structure of lower highs and lows is technically bearish. Thus we could see a retest of point 2 at 0.7170, then point B at 0.7106.
Upside pullbacks face 0.7270-0.7290 as a key resistance. If broken, look for a retest of 0.7370.
NZDUSD has also reversed the bullish wave we have seen earlier. We are approaching the rising trend line shown on chart . Despite the downside bias, the NZD has been relatively resilient compared to the other majors, and as we approach the rising trend line, I prefer to be neutral awaiting a confirmation of the next potential direction.
Short term resistance to watch at 0.6980, if upside pullbacks fail to retake retake this level the downside resumption scenario will be favored, towards 0.6880 next potential support.
Alternatively, if we break back and hold above 0.6980, 0.7070 could be the next possible stop.