Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD falls from symmetrical triangle

As it was expected, a combination of the 55-, 100- and 200-hour SMAs around the weekly PP, which is located at the 1.1948 level, did not allow the rate to surge any further. Because of the rebound, most of the previous trading session movement of the pair was guided by bears, which pushed it out of a symmetrical triangle. In other words, a long-term dominant ascending channel was broken. Such outcome indicates that today the currency rate is likely to continue to slip to the bottom, trying to reach the lower trend-line of a three week long descending channel. And the fact that it located below the monthly PP at 1.1881 and the weekly S1 at 1.1861 as well as the above moving averages, only supports this scenario.

 

[KristinaDC]

GBP/USD sneaks below monthly R2 at 1.3485

Although initially the currency pair managed to climb above the weekly PP at 1.3536 that was backed up by the 55- and 100-hour SMAs, but later it failed to strengthen this position and continue the surge. In result of the two hour downfall, the Pound lost 67 basis points against the Greenback, thus breaking the previously active rectangle pattern whose lower trend-line was represented by the monthly R2 at 1.3485. During this trading session the Sterling might try to restore some of the lost positions, but this attempt is likely to be neutralized by the 200-hour SMA, which is located near the 1.3494 level. In additional to that, the northern direction also contains the previously mentioned 55- and 100-hour SMAs, which are lying along the upper edge of a supposed new descending channel.

 

[KristinaDC]

USD/JPY falls amid Kim-Trump hostile rhetoric

An increasing hawkish rhetoric between the United States and North Korea led to appreciation of the Yen by 63 basis points just in three hours. As a result, the pair broke through the 100-hour SMA as well as the weekly PP and ended up near the 200-hour SMA. Accordingly, today the currency rate might try using this downside momentum to slip to the area between the 111.38 and 111.26 levels. On the other hand, a number of factors indicate on presence of a new junior descending channel. If this assumption is true, then the rate should not fall below the 111.40 mark. In contrast, the buck might use the above 200-hour SMA as a springboard to try to return at least to the weekly PP at 111.90.

 

[KristinaDC]

XAU/USD breaks descending channel

In result of the previous trading session, the yellow metal managed to recover not less than 1.26% against the buck. Such rapid advance pushed the pair not only through the psychological 1,300.00 level but also through the upper boundary of a descending channel as well as the 200-hour SMA. Most likely this sudden interest in gold was attributed to very hostile rhetoric between the US and North Korea. On the other hand, such movement could also have a technical rationale, as by the moment, the pair has reached the 1,313.61 mark that represents a point from which it entered into a downfall six days ago. This fact as well as the additional resistance set up by the weekly R1 at 1,315.94 suggests that the rate is likely cool down and eventually resume the fall.

 

[KristinaDC]

EUR/USD tries to break medium-term channel
As it was expected, the Dollar continued to appreciate against the Euro and reached the bottom edge of medium-term descending channel yesterday. In fact, a reaction of traders on release of the CB Consumer Confidence even pushed the pair a little bit outside the pattern. But the subsequent Janet Yellen’s speech returned it back to the 1.18 area. Although bears are relentlessly trying to push the rate to the south, from trade patterns perspective a rebound should follow. In favour of this scenario speaks the fact that the pair is located at the intersection of lower boundaries of two descending channels as well as the weekly S2 at 1.1774. On the other hand, the 55- and 100-hour SMAs most probably will try to block any attempt to return back to the 1.1861 levels.

 

[KristinaDC]

EUR/USD encounters 100% Fibo near 1.1715

Unfortunately for the Euro, a shared border of two senior descending channels did not manage to withhold the rate from falling to the south. However, this plunge did not last for long, as the currency pair made a turnaround apparently form the 100% Fibonacci retracement level at 1.1715. Given that this barrier is additionally secured by the monthly S1 at 1.1692 and the weekly S3 at 1.1688, the further appreciation of the buck seems unlikely. On the other hand, the surge in the opposite direction is similarly obstructed by the weekly S2 at 1.1774 and the slipping 55-hour SMA. For this reason, the pair might move horizontally for some time waiting for a strong impulse, which can be provided, for instance, by release of data on the US Final GDP.

 

[KristinaDC]

GBP/USD about to leave the falling wedge

Contrary to expectations, the currency exchange rate did not make any significant moves yesterday and, for this reason, stayed in a falling wedge for additional day. However, the fact that the first four hours of this trading session were dominated by bears suggests that the pair is likely to leave the pattern in the southern direction.

Such outcome is supported not only by the weekly S1 located at the 1.3412 level but also by the 55-hour SMA, which is moving precisely along the resistance line of the wedge. Although the pair might face a strong support in the area between the 1.3350 and 1.3328 marks, from a larger perspective the Greenback should continue to gain value against the Pound.

 

[KristinaDC]

USD/JPY breaks long term pattern

Unfortunately for the Yen, the buck traders managed to push the pair through a combined resistance formed by the monthly R2 at 112.54 in conjunction with the upper trend-line of a ten month long falling wedge pattern. Despite such significant breakthrough, the exchange rate continues to fluctuate in two recently formed ascending channels whose cross point might represent a breaking point of another minor rising wedge. If this assumption is true, the pair might try to slip to the bottom. However, all these attempts are likely to be neutralized by a combination of the rising 55-, 100- and 200-hour SMAs. To put differently, if the pair has indeed left the long-term pattern, it might freely continue to climb to the top, facing no significant obstacles on its way (at least in the short run).

 

[KristinaDC]

XAU/USD approaches significant support

Although previously the pair failed to break through the 1,290.93 level, a pressure from multiple technical indicators eventually pushed it to the bottom. As a result, the exchange rate reached the supposed yesterday’s target at the 1,283.66 mark and represented the weekly S1. In theory, the buck has all means to drag the gold price down to the monthly S1, which is located at the 1,273.91 level and is additionally backed up by the 100-day SMA. However, in order to do that it has to break through the 61.8% Fibonacci retracement level at 1,278.96. In the short run these barriers a likely to force the pair to make a rebound. But from larger perspective, the pair has to pave the way through them and ultimately reach the bottom edge of the dominant ascending channel.

 

[KristinaDC]

EUR/USD consolidates near weekly S2 at 1.1774

After breaking through a combined resistance set up by the weekly S2 at 1.1774 and the slipping 55-hour SMA, the currency pair lost an upside momentum provided the 100% Fibonacci retracement level at 1.1715 and started to move horizontally. The reason behind inability to climb further to the top was another technical barrier represented by the 100-hour SMA near 1.8000. As a result, today the pair remains tightly squeezed between the above indicators. Throughout the day the bears might drag the pair slightly to the bottom. But, generally, the Euro is expected to continue to appreciate against the Dollar, step-by-step crossing different resistance levels at 1.1810, 1.1861, 1.1881 and 1.1933.

 

[KristinaDC]

GBP/USD breaks from falling wedge to north

In accordance with trade patterns theory, the currency pair made breakout from a falling wedge to the top. The breaking point matched with two speeches delivered by Governor Carney and Theresa May at the at the Bank of England's conference. Unfortunately, the upside momentum was not particularly strong, as subsequently the exchange rate failed to bypass even the 100-hour SMA near 1.3451. This fact call into question the ability of bulls to support the further surge and push the pair through a combined support set up by the 200-hour SMA together with the monthly R2 at 1.3485. In addition to that, later this day Governor Carney will deliver another speech, which might lead to bearish sentiment once again. After all, the southern side currently is remaining a barrier-free area.

 

[KristinaDC]

USD/JPY rebounds from 100-hour SMA near 112.33

At the present moment, the currency exchange rate is fluctuating in three different channels. After making a rebound from upper edge of two of them, which matched with Governor Kuroda speech, it tried to slip to the bottom. But this attempt was expectedly neutralized by the rising 100-hour SMA. In addition to that, this indicator also helped to keep the rate within the dominant ascending channel. Accordingly, today the pair is expected to gradually move to the top, trying to reach an intersection of the above ascending channel and junior descending channel somewhere near the 112.90 and 113.10 marks. In support of this scenario speaks the fact that the only barrier that the pair is facing on its way is the weekly R1 at 112.81.

 

[KristinaDC]

XAU/USD fails to climb above 55-hour SMA

As it was expected, the 61.8% Fibonacci retracement level at 1,278.96 appeared to be too strong barrier to be crossed from the first attempt. Accordingly, the pair made a rebound but recovery of the gold was hindered by the slipping 55-hour SMA, which pushed it back to weekly S1 at 1,283.66. At the moment, the southern side remains too strongly protected by the above indicators to be successfully bypassed. The only chance to rapidly slip to the bottom is to gain an impulse from some significant fundamental event. However, there are no such types of events in economic calendar scheduled for today. In contrast, an uneasy geopolitical situation in the Pacific region is expected to continue to motivate investors to transfer their funds in less risky assets, such as gold.

 

[KristinaDC]

EUR/USD slips on Catalan referendum

In line with expectations, the currency exchange rate managed to break to the top, crossing the 100-hour SMA plus another resistance level near 1.1810. During the two-day surge the pair even formed a little ascending channel. But due to referendum on independence in Catalonia the Euro lost 0.3% against the Dollar and fell out of the channel. The fact that now the pair is located below a combination of the 55- and 100-hour SMAs, suggests that might continue to the move to the bottom. The downfall might be additionally spurred by the official comments from the EU, Catalan and Spanish governments through the day. However, this event is unlikely to change the general scenario, according to which the rate is expected to continue to climb to the top after bouncing off from the 100% Fibo at 1.1715.

 

[KristinaDC]

GBP/USD fails to break above 55- and 100-hour SMAs

In accordance with expectations, a combination of the 55- and 100-hour SMAs as well as the former monthly R2 did not let the pair to make any notable advances on Friday. In fact, they continued to push it to the bottom, simultaneously forcing to form a minor symmetrical triangle. Due to release of a whole bunch of various fundamental data during this week, it is difficult to project how the pair is going to move. The only thing that can be said for sure is that the northern path is secured by numerous technical indicators, such as the 200-hour SMA and the 50% Fibonacci retracement level at 1.3503. In addition to that, the pair has recently made a rebound from the upper boundary of a long-term descending channel. Hence, the gradual slip to the bottom remains a more plausible scenario.

 

[KristinaDC]

USD/JPY surges towards updated weekly R1 at 113.36

Despite a certain volatility that was caused by a release of information on the US consumer spending, the pair continued to gradually climb to the top, as expected. In the first half of Monday, the rate is likely to cross the upper trend-line of a junior descending channel and continue to head towards the updated weekly R1 at 113.36. Such scenario is supported by the 55-, 100- and 200-hour SMAs as well as the weekly PP, which are all located below the current market price.

The only event that has a chance to push the currency pair in the opposite direction is a release of US ISM Manufacturing PMI at 14:00 GMT. Otherwise, the pair is projected to head to the north, fluctuating in a senior ascending channel.

 

[KristinaDC]

XAU/USD breaks 61.8% Fibonacci retracement level

Due to release of another set of the US inflation and consumer spending data, which did not change the overall prospect about the upcoming interest rate hike, the buck managed to drag the bullion through the 61.8% Fibo level at 1,278.96, thus confirming an existence of a new descending channel. Although this breakthrough happened a little bit earlier than expected, but it still perfectly fit into the general picture, in which the rate was expected to gradually move to the bottom, trying to reach the lower edge of a dominant ascending channel. Nevertheless, during this trading session the pair is likely to make a temporary rebound near the 1,273.14 level, which represents location of the 100-day SMA. If such scenario materializes, the junior channel might transform into a falling wedge.

 

[KristinaDC]

EUR/USD breaks 100% Fibonacci retracement level

Contrary to expectations, the currency pair broke through the combined support set up by the 100% Fibonacci retracement level at 1.1715 and the updated weekly S1 at 1.1710. The reason behind such deep immersion was based on several reasons, such the Catalan referendum and a release of better than expected data on the US manufacturing activity. There is a small chance that the Euro will manage to restore some positions against the Dollar. However, the average market sentiment remains 58% bearish. In addition to that, now traders can rely on the above technical barriers, as a resistance to push the rate towards the 1.17 mark. By the way, from the south the rate does not face any notable obstacles up until the monthly S1 at 1.1658.

 

[KristinaDC]

GBP/USD reaches bottom edge of channel down

A combination of release of worse than expected British and better than expected American manufacturing activity data created a downside momentum, which was strong enough to drive the pair through a combined support formed by the monthly PP at 1.3322 and the weekly S1 at 1.3305 and push right to the bottom edge of senior descending channel. From daily perspective, the exchange rate has to continue to pave the way to the south. But in the short run it might make a rebound, as the above boundary is secured by the weekly S2 at 1.3210. Plus there is a need to take into account that the 1.3200 mark represents a psychological support level and might be surrounded by many buy limit orders. However, the UK Construction PMI data release might also leave certain impact on the pair.

 

[KristinaDC]

USD/JPY breaks from junior channel

In line with expectations, the Greenback continued to gain value against the Yen, breaking through the upper edge of a junior descending channel. The surge was mainly based on release of positive information on the US manufacturing activity. However, a combination of the 55- and 100-hour SMAs located near the lower support line of a dominant ascending channel additionally supported the above-mentioned soar. Because of the hawkish Fed outlook, anticipation of Trump’s tax reform and other favourable fundamental background, the pair is expected to continue to head to the north. However, there is a need to take into account that due to 48 pips advance just in three hours the Yen might force the pair to make a temporary rebound and restore some lost positions.