IKOFX Daily Market Analysis

[team.ikofx]

GOLD Might Present A Tradable Opportunity Soon

GOLD seems to be consolidating in a $20 range for the last few days. However, the precious metal is now forming a pattern on the hourly chart, which could lead to a break lower or higher in the coming days. The most important thing is the trigger. GOLD traders are waiting for a reason to make a substantial move. We have the FOMC meeting minutes lined up during this week, which can act as a catalyst for the yellow metal prices in the short term. So, we need to wait for the right time and analyse the price action carefully before jumping into a trade.

Technically, there is a trend line forming on the hourly chart for GOLD. This trend line holds a lot of importance, as it represents a crucial confluence zone of the 200 hourly simple moving average (SMA), 100 hourly SMA and 50% fib retracement level of the last drop from the $1331 high to $1309 low. So, if the prices break above the mentioned confluence area, then it might go back towards the last high and even break it to trade higher. So, buying with the break might not be a bad deal in the short term.

Alternatively, if GOLD fails to break the mentioned confluence area and turns lower, then it might head back towards a bullish trend line which is preceding from the $1306 low.

If it breaks the trend line and support area, then a re-test of $1306 is possible. In that situation, buyers will be tested and if they fail, then a break below the mentioned level might take GOLD towards the $1280 level.

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[team.ikofx]

USDCAD Bulls Fight To Keep The Pair Higher

The Canadian dollar recently dived to test the 1.0600 support area against the US dollar where buyers appeared to hold the downside in the USDCAD pair. However, the pair has not confirmed a short-term bottom, as it is still trading below a key resistance zone. There are few risk events scheduled in the coming days for both the Canadian dollar and the US dollar, which might define the trend for the pair in the short term. The most important one is the Canadian employment data, which will be released on the coming Friday. A better than expected report might take the Canadian dollar higher and thus push the USDCAD lower again.

Technically, there is an ascending channel formed on the one-hour chart for the USDCAD pair. The pair recently climbed above the 50% fib retracement level of the last drop from the 1.0750 high to 1.0620 low, but failed to gain momentum above the same. However, one positive thing to note as of now is that the pair is trading above the 100 and 200 (1H) simple moving average, which might encourage the bulls in the short term. If the pair moves lower from the current levels, then both these moving averages are likely to act as a support for the pair, followed by the channel support trend line.

Alternatively, if the pair jumps from the current or a bit lower levels, then the 50% fib level might again come into play. If the pair breaks the mentioned fib level, then a test of the channel resistance area, which also coincides with the 61.8% fib would be on the cards.

So, keep an eye on the upcoming events and trade accordingly, as the market could be choppy moving ahead.

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[team.ikofx]

Buying Dips A Good Strategy In GBPUSD

The British pound was seen trading lower earlier today against the US dollar after climbing as high as 1.7167. The market was not seen willing to take the GBPUSD pair higher before a major risk event – the BOE interest rate decision. Moments ago, the UK trade balance data was published by the National Statistics. The report mentioned that there was a deficit of £9.2 billion on goods, which was partly offset by an estimated surplus of £6.8 billion on services. This was more than the market expectations of £8.75 billion. This further added to the bearish pressure on the GBPUSD pair.

Technically, there is a triangle forming on the one-hour chart for the GBPUSD pair. The pair has tested the triangle resistance trend line a number of times, but failed to overtake the same. As a result, it came crashing down, and broke the 100 and 200 hourly simple moving averages. Moreover, the pair is now trading below the 50% fib retracement level of the last move higher from the 1.7085 low to 1.7167 high. It is very likely that the pair might fall towards the 61.8% fib retracement level. If sellers take control, then the triangle support trend line might be tested where buyers are likely to appear. It would be very difficult for sellers to push the pair below the triangle and open the doors for a new low in the short term.

Alternatively, if the pair bounces from the current or a bit lower levels, then the broken moving averages could act as a resistance for the pair.

So, keep an eye on the triangle support area, and if the pair stabilizes around the same, then the chance of a bounce back might increase moving ahead.

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[team.ikofx]

GBPCAD Setting Up For A Break Ahead Of Canadian Employment Report

The Canadian dollar looks like getting bids against most major currencies ahead of the all-important risk event – the Canadian employment report containing details of employment change, full employment change, part-time employment change, participation rate and the unemployment rate will be published by the Statistics Canada later during the NY session. The market is expecting a stable outcome this time, and that is the reason why the Canadian dollar is earning bids before the data release. One should keep a close eye on this event later today, as it has the potential to create a lot of volatility in the Canadian dollar.

The British pound has also traded lower against the Canadian dollar recently. There is a bearish trend line formed on the 4 hours chart for the GBPCAD pair, which has contained the upside in the pair on a few occasions. The pair recently climbed higher and failed around the mentioned trend line, which also coincided with the 50% fib retracement level of the last drop from the 1.8476 high to 1.8143 low. Currently, the trend line is coinciding with the 38.2% fib level. So, if the pair manages to jump from the current levels, then it might face resistance around the mentioned trend line resistance zone at 1.8270-80. It would be difficult for buyers to take the pair higher, as the 200 and 100 moving averages also sit around the stated area.

In short, selling around the resistance zone in the near term might not be a bad idea. As long as the pair is trading below the 200 moving average on the 4 hours chart, the chance of a move lower is more compared to a break higher.

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[team.ikofx]

Euro Looks To Trade Higher Against New Zealand Dollar

The Euro traded close to the 1.5400 support level during this past week against the New Zealand dollar and found buyers. The EURNZD pair consolidated for some time in a small range, and moments ago traded a bit higher to challenge the 100 hourly simple moving average. However, it would be very difficult for the Euro buyers to gain momentum against the New Zealand dollar, as the later one has shown a lot of strength recently.

There are two bearish trend line on the hourly chart for the EURNZD pair. The first trend line sits just above the 100 hourly SMA, which also coincides with the 38.2% fib retracement level of the last drop from the 1.5584 high to 1.5410. A break above the mentioned trend line might call for a move towards the next bearish trend line, which is coinciding with the 50% fib level. As mentioned earlier any further strength looks difficult as of now, so there is a chance that the EURNZD pair might fail around the 50% fib level and trade back towards the 100 hourly moving average. If in case, the pair manages to clear the second trend line as well, then it might climb towards the 200 hourly moving average.

Alternatively, if the pair fails to break higher, then the last low of 1.5410 might come into play again. It would be interesting to see whether the pair can manage to break the mentioned support level or not it that happens.

Overall, as long as the pair is trading above the 1.5410 level the chance of a run towards the 1.55 level cannot be denied.

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[team.ikofx]

More Losses To Follow For NZDUSD

The New Zealand dollar during this past week tried to capitalize on gains and break the 0.8820-30 resistance area to trade higher against the US dollar. However, the NZDUSD pair failed to do so, and as a result it is now moving lower. There is an important economic released lined up later during the upcoming Asian session, which might cause swing moves in the pair. The New Zealand’s consumer price index will be published by the Statistics New Zealand with the expectations of a rise from 1.5% to 1.8%. If the outcome stays in line with the forecast, then the NZDUSD pair might gain some bids moving ahead. On the other hand, if it misses, then the recent losses could extend in the short term.

There was a bearish trend line on the hourly timeframe for the NZDUSD pair. The pair bounced numerous times from the highlighted trend line, but sellers finally managed to pierce the same. After the break, the pair climbed one more time to test the broken trend line, but buyers failed to take the pair higher from there. The most important thing is that the same trend line was coinciding with the 100 moving average on the one hour chart. Currently, the pair is flirting with the 38.2% fib retracement level of the last move higher from the 0.8713 low to 0.8835 high, and approaching the 200 moving average.

There are chances that the pair might bounce from the current or a bit lower levels, but it might face resistance around the previous swing area around the 0.8800 level.

So, as long as the pair is trading below the 0.8800-10 levels selling rallies might not be a bad call in the short term.

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[team.ikofx]

AUDJPY Nosedives Despite Positive Chinese GDP

The Australian dollar was seen trading lower against most major currencies, including the US dollar and the Japanese yen. The AUDJPY pair broke an important support area and traded lower below the 95.00 level. Fundamentally, the Chinese GDP data was released earlier during the Asian session, which registered better than expected readings. The report published mentions that the Chinese GDP grew by 2% in the second quarter of 2014, beating the expectation of a 1.8% rise. However, the negative sentiment prevailed in the market, as the Australian dollar dived across the board.

There was a critical trend line on the hourly chart for the AUDJPY pair. The pair broke the highlighted trend line and traded lower to trade as low as 94.91. Currently, the pair has retraced back some of the losses and retesting the broken trend line, which is now coinciding with the 38.2% fib retracement level of the last drop from the 95.50 high to 94.91 low. It looks difficult that the pair might trade back above the trend line. However, if that happens, then next resistance can be seen around the 100 hourly moving average, which is coinciding with the 50% fib level. So, sellers are likely to appear around the 95.10-20 levels.

If the pair fails around the mentioned levels, then a run towards the recent low of 94.91 might be possible. If sellers take control, then they might break the 94.90 support level to challenge the 94.70 low.

Overall, as long as the pair is trading below the 100 hourly moving average selling rallies looks like a good option in the short term. The hourly RSI is also below the 50 level, which can be considered a negative sign.

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[team.ikofx]

Euro Losses To Extend Post Short-term Profit Taking Against Yen

The Euro continues to trade lower against few major currencies, including the US dollar, the British pound and the Japanese yen. However, one need to be very careful from the here on, as the Euro is approaching a critical support area against most of its counterparts. The EURJPY pair is also approaching a very important support area, which could possibly hold the downside in the pair. However, any bounce in the Euro might be seen as a part of correction, and after that completes it could again move lower in the short term.

There is a crucial trend line on the 4 hour chart for the pair, which is likely to contain the downside for now. If the pair bounces from the current levels, then it might face a monster resistance around the 137.70-80 levels. The mentioned level also coincides with the 38.2% fib retracement level of the last drop from the 138.74 high to 137.20 low. Any further upside might find buyers around the 50% fib level. If such a retracement happens, then it can be seen as a selling opportunity, as the market sentiment still favours more losses in the pair. However, we need to be very careful with such moves at times.

There is also a possibility that the pair might not retrace from the current levels, and breaks the trend line support area to trade lower. If that happens, then initial support after the break can be seen around the 137.00 level, followed by the 136.60 swing area.

There is an important risk event scheduled today in the Euro zone i.e. the Euro zone inflation data will be published. If the outcome meets the expectation, then the anticipated correction might occur.

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[team.ikofx]

USDJPY Looks Set For One More Leg Lower

The Japanese yen was seen gaining ground against most of its counterparts, including the US dollar yesterday. The rise in the Japanese yen was mainly due to ongoing tensions in Ukraine and Gaza. This is leading to a drop in the USDJPY pair. Recently, the pair moved lower towards the 101.10/00 support levels, which protected the downside in the pair. However, the market sentiment remains in favour of more gains in the Japanese yen, but we need to also consider the fact that the USDJPY is reaching important support levels.

There is a trend line formed on the 4 hour chart for the pair, which is acting as a barrier for the US dollar sellers. The recent fall also found support around the same trend line at 101.06 level. The pair is now again showing signs of weakness and might fall one more time after completing the current correction. One key point to note here is that the trend line is now coinciding with the 1.236 extension of the last leg higher from the 101.06 low to 101.80 high. So, the 100.90-80 support area holds a lot of importance in the short term for the pair, which might cause a serious rise in the pair.

It is also possible that the pair might not fall from the current levels and continue trading higher. In that situation, an immediate resistance can be seen around the 100 moving average on the 4 hour chart, which is currently at 101.62. A break above the same might call for a test of the previous high of 101.80.

The RSI on the 4 hour chart bouncing from the extreme levels, but could face hurdle around the 50 level. So, as long as the pair is below the 101.80 level a down-move towards the 100.90 level cannot be denied.

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[team.ikofx]

British Pound Remains Buy On Dips Against The Swiss Franc

The British pound suffered some losses against the US dollar and the Swiss franc during this past week, but later it managed to bounce back from the important support levels. The GBPCHF pair fell towards the 1.5300 support level after setting a short-term high at 1.5403 level. The pair managed to find buyers around the mentioned support area and currently climbing higher. This particular bounce came from a very technical level i.e. the 50% fib retracement level of the last move higher from the 1.5216 low to 1.5403 high. So, this can be considered as a significant level for a bounce back.

However, the follow through after the bounce was not convincing, which has left the door open for one more leg lower in the short term. There is a bullish trend line on the 4 hour chart for the pair, which might act as a catalyst for the pair in the coming sessions. In addition, there are few more critical support levels that could act as a barrier for sellers. Initially, the 50% fib level, then the 61.8% fib and finally the 100 moving average on the 4 hour chart might provide support to the pair. So, the 1.5290-70 area is a key support zone for the pair, and it might bounce again from here if it moves lower from the current levels.

It is also possible that the pair might not fall from the current levels. In that situation, initial resistance can be seen around the swing high of 1.5360. If the British pound buyers manage to pierce the same, then a test of the 1.5400 handle is possible in the short term.

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[team.ikofx]

AUDUSD Registers Another Failed Attempt To Break Higher; Courtesy RBA’s Stevens

The Australian dollar has a massive resistance around the 0.9390-0.9400 level against the US dollar. The AUDUSD pair has tried more than twice to break the mentioned resistance level and settle above it, but every time it breaks the resistance sellers appear to push the pair down again. Earlier during the Asian session, the Reserve Bank of Australia Governor Glenn Stevens was scheduled to deliver a speech. For a change, he did not speak about the rising Australian dollar, and mentioned that “the highly accommodative financial conditions will then have a more powerful effect in engendering real growth”, according to a report published on Bloomberg.

The AUDUSD pair spiked higher to break a bearish trend line on the hourly chart, but that turned out to be a false break, as the pair failed to close above the trend line. The most important point to note here is that the mentioned trend line is coinciding with the 50% fib retracement level of the last drop from the 0.9455 high to 0.9330 low. So, this particular failure can be seen as critical, and might encourage the Aussie sellers in the short term. The pair might turn lower from the current or a bit higher levels. Initial support can be seen around the 200 hourly moving average at 0.9380, followed by the 100 hourly moving average at 0.9370.

It is also possible that the pair might not fall from the current levels. In that situation, if the pair breaks the trend line and settles above the 50% fib level, then it could open the doors for an upside momentum towards the 0.9420 resistance level.

Any further gains should be limited by the previous high of 0.9450. Overall, as long as trend line holds more downside is possible.

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[team.ikofx]

British Pound Eyes Carney For A Break

The British pound traded a touch lower against the US dollar yesterday after the US CPI release, but later managed to recover most of the lost ground. The GBPUSD pair traded as low as 1.7041, and then bounced back towards the 1.7070 level earlier during the Asian session. There are two important levels to keep an eye on – first one is a support at 1.7040 level and the second one is a resistance at 1.7090. A break on either side might trigger swing moves in the GBPUSD pair in the short term. The Bank of England’s Governor Mark Carney will be delivering a speech later today, which could act as a catalyst for the British pound during the late London session.

There is a trend line formed on the 4 hour chart for the GBPUSD pair, which has held the downside in the pair on a number of occasions. The most important thing as of now is that the 200 moving average is sitting right around the trend line support area. So, if the pair moves lower from the current level, then the mentioned support area at 1.7022 might act as a tough barrier for the British pound sellers. If they fail to break the same, then a bounce back towards the 1.7070 resistance level would be on the cards.

It is also possible that the pair might not fall from the current levels. In that situation, the pair could break the 1.7070 resistance level and challenge the next barrier at 1.7090. A break above the 1.7090 level will be very difficult, and would largely depend on Carney’s speech. So, we need to watch this particular event closely and trade accordingly.

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[team.ikofx]

USDJPY Remains Supported On Dips

There was no major economic release lined up yesterday in the US, and as a result the US dollar mostly traded in a range against the Japanese yen. However, there is no denial that the USDJPY pair is under bullish pressure, as there are a lot of signs, which point towards more strength in the pair moving ahead. First one is that the pair is trading above the 100 and 200 hourly moving average, and the second one is that it has managed to clear the 61.8% fib retracement level of the last drop from the 101.79 high to 101.11 low. So, it looks like that the pair might trade higher in the coming sessions, and may be towards the last high of 101.79.

However, the 101.60 level is a major hurdle for the pair in the short term, and that is the reason why the pair might dip one more time before it breaks higher. There is a bullish trend line formed on the hourly chart for the USDJPY pair, which might act as a support for the pair on the dips. The mentioned trend line is now moving along with the 100 moving average, which is a positive sign and escalates the importance of the trend line support area. So, the 101.40-30 support levels hold the key for the pair in the short term.

It is also possible that the pair might not retrace from the current levels and break higher. In that situation, initial resistance can be seen around the 76.4% fib retracement level, followed by the previous swing high of 101.79.

The US initial jobless claims and new home sales data will be published later during the NY session, which is likely to act as a catalyst for the pair moving ahead.

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[team.ikofx]

Euro Likely To Trade Higher In The Short Term

The Euro managed to find buyers around the 1.3440 support level against the US dollar. The Euro zone manufacturing and services PMI which were released during the yesterday’s London session came better than expected and ignited a solid bullish momentum for the EURUSD pair. The pair traded higher close to the 1.3490 resistance area where sellers appeared again. It is under retracement as of writing, and waiting for the economic releases lined up later today.

The upside in the EURUSD pair yesterday stalled right around an important bearish trend line on the 4 hour chart. However, there is a monster bullish candle formed on the hourly chart, which might encourage the bulls in the short term. Currently, the mentioned trend line is also coinciding with the 23.6% fib retracement level of the last down-move from the 1.3639 high to 1.3437 low. So, a break and close above the mentioned trend line might call for more gains in the pair moving ahead. Initial resistance can be seen around the 38.2% fib level at 1.3515, followed by the 50% fib level at 1.3540.

Alternatively, if the pair fails to break the bearish trend line and moves lower again, then the 1.3440 support level could hold the downside in the pair. A break below the mentioned level might ignite more losses in the EURUSD pair, which could take it towards the 1.3400 level.

The hourly RSI is bouncing from the extreme levels, and it is likely to continue gaining momentum. There are few economic releases lined up later during the London session, which might act as a catalyst for the pair in the short term. The bottom line is that the chance of pair trading higher is more moving ahead.

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[team.ikofx]

Euro Might Correct In The Short Term

The Euro moved lower against the US dollar during this past, and traded as low as 1.3421. The EURUSD pair is currently consolidating in a range of 15 pips. There is a chance that the pair might retrace from the current levels, as it has already moved a lot in the recent days. Moreover, the hourly RSI is also around the extreme levels, which means that there might be a retracement sooner or later.

There are two trend lines formed on the hourly chart for the EURUSD pair. First one has managed to hold the downside on a couple of occasions, and second one can be considered as a bearish trend line, as it has held the upside. If the pair manages to retrace from the current levels, then it might move closer to the 38.2% fib retracement level of the last drop from the 1.3475 high to 1.3421 low. It is also possible that the pair could test the 50% fib level before sellers appear again. Any further strength should be limited by the highlighted bearish trend line.

Alternatively, if the pair fails to trade higher and breaks the 1.3421 support level, then a test of the all-important 1.3400 level might be on the cards. Moreover, the 1.3380 level is also very critical, and the Euro buyers might appear around these levels to hold the downside in the pair.

The US services PMI and pending home sales data will be published later today. The Euro’s fate in the short term depends a lot of the upcoming economic data. Overall, a short-term correction is a possibility unless something emerges as a market moving event.

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[team.ikofx]

GBPUSD: 1.6980 Support Holds Key In The Short Term

The British pound is trading lower against the US dollar. Yesterday, the GBPUSD pair managed to gain bids and trade higher, but later lost most of the gains. The pair is struggling to break the 1.7000-10 resistance area, which is acting as a hurdle for the pair. There is also a strong support forming around the 1.6980 level, which is protecting the downside in the pair. However, if the mentioned support level is breached, then more losses cannot be denied in the pair.

There is a bullish trend line formed on the hourly chart for the GBPUSD pair. The pair as of writing is testing the trend line support area at 1.6980. However, the positive point to note from the charts is that the hourly RSI is just flirting around the 50 mark, and if it manages to settle above the same, then a short-term bounce is possible in the short term. Alternatively, a break below the 50 mark might encourage the British pound sellers. In that situation, the pair might break the trend line support area and challenge the 1.6960 low. Any further losses could take the pair closer to the 1.6940-30 support level.

There are a few economic releases scheduled in the UK later during the London session, including the mortgage approvals data, mortgage lending, net lending to individuals and BOE credit limit figures. Moreover, the MPC member Broadbent will also be speaking around the same time. So, there is a chance of swing moves in the GBPUSD pair.

Overall, there are several supports on the way down for the pair, and a break below the trend line looks a short-term possibility.

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[team.ikofx]

US Dollar Likely Heading Towards A Major Resistance Against The Swiss Franc

The US dollar is trading higher against the Swiss franc, as the US consumer confidence data which was released yesterday jumped sharply. The US consumer confidence registered a reading of 90.9, which is a 7-year, beating the expectation of 85.3. The outcome ignited in a rise in the US dollar, as the EURUSD pair traded lower and the USDCHF pair jumped higher to record a new monthly high. The USDCHF pair traded as high as 0.9074 yesterday. However, it looks like that the pair is heading towards an important resistance area in the short term, which can cause a pullback in the pair.

Technically, there is a monster bearish trend line on the daily chart for the USDCHF pair, which now coincides with the 76.4% fib retracement level of the last major drop from the 0.9248 high to 0.8700 low. So, if the pair pushes a bit higher from the current levels and closer to the mentioned trend line, then the US dollar sellers might appear to contain the upside in the pair. The most important point to note from the charts is that the daily RSI is around the extreme levels, which can result in a sharp pullback in the USDCHF pair.

If at all the pair manages to clear the 76.4% fib level, then a run towards the last high of 0.9248 is possible. On the downside, initial support can be seen around the 0.9000 level, which acted as a resistance earlier and might act as a support moving ahead.

There is an important risk event lined up later during the New York session – the Fed will announce the interest rates along with the taper details. So, the US dollar might move a lot during this particular event.

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[team.ikofx]

USDJPY: More Gains Favored As It Clears An Important Resistance Zone

The US dollar surged higher yesterday after the release of the ADP employment change figures and the US GDP data. The earlier one registered one more reading above the 200K mark, and the latter one surprised with a solid reading of 4%, beating the expectation of 3% growth rate. This ignited a sharp rally in the US dollar. One of the biggest gainers of the day was the USDJPY pair, as it climbed above the 102.60 level to challenge the 103.00 level. The pair looks like retracing some of the recent gains, which can be seen as a buying opportunity.

Technically, there was a major resistance around an important confluence area of a bearish trend line on the daily chart, 100-day moving average, 200-day moving average and 38.2% fib retracement level of the last drop from the 104.11 high to 100.81 low. The pair managed to break the mentioned confluence area yesterday and closed above it. This particular break can be seen as very crucial, as it opens the door for more gains in the pair. The pair did climb yesterday close to the 103.00 level, but failed to close above the 61.8% fib level. So, a short-term pullback from the current levels cannot be denied. In that situation, the pair might fall closer to the broken resistance zone. The 102.40-20 area can now be seen as a major support area.

The RSI on the daily chart is around the extreme levels, which increases the possibility of a correction in the short term. The US initial jobless claims number and Chicago PMI data will be published later today, which might act as a catalyst for the pair.

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[team.ikofx]

What’s Holding The Upside In AUDUSD?

The Australian dollar has recently struggled a lot against the US dollar, but managed to find some bids around the 0.9280 support level. The pair did manage to bounce from the mentioned level, but failed once again to break higher around an important level. The Australian Producer Price Index (PPI) was also published earlier during the Asian session by the Australian Bureau of Statistics. The Forex market was expecting the Australian PPI to increase by 0.7% this time around, but the outcome was a disappointing one. The report mentioned that the Australian PPI fell by 0.1% in the second quarter of 2014.

Technically, there is a bearish trend line formed on the hourly chart, which held the upside in the pair earlier during the Asian session. Moreover, the same trend line also coincided with the 50% fib level of the last move lower from the 0.9354 high to 0.9279 low. So, technically it was a major hurdle for the AUDUSD pair, and it also aligned with the fundamentals. The pair is again heading back towards the 0.9280 support area. The mentioned support holds a lot of importance in the short term, as a break below might call for more losses in the pair maybe towards the 0.9220 level. So, one need to be very careful trading this pair in the short term.

Not to forget there is an important risk event lined up later during the NY session i.e. the US nonfarm payrolls and the unemployment data will be published. So, a lot of moves are expected during the upcoming sessions.

Overall, as long as the pair stays above the 0.9280 level the chance of a recovery is possible moving ahead.

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[team.ikofx]

USDJPY Might Correct Lower Before Moving Back Higher

The US dollar traded lower against most of its counterparts, including the Japanese on last Friday after the miss in the US NFP figures. The USDJPY pair after trading as high as 103.08 moved lower back towards the 102.33 level, which also coincided with the 38.2% fib retracement level of the last move higher from the 101.08 low to 103.08 high. This move can be considered as a wave 1, and it looks like the pair under wave 2, which might take it closer to the 102.80 resistance area. The mentioned level might act as a hurdle for the US dollar buyers in the short term.

If the pair fails to break higher and trades lower, then initial support can be seen around the 102.33 level. However, the most important support can be seen around the 50% fib level, which also coincides with a critical bullish trend line on the 4 hour chart. So, it is around the 102.10-00 level where wave 3 might complete and call for a new leg higher in the pair. The mentioned support level holds a lot of importance, as if the US dollar buyers fail to defend the same, then a break below could take the pair back towards the 101.60-50 support area.

On the upside, initial resistance can be seen around the 102.80 level, followed by the last high of 103.08 level. Any further gains might take the pair closer to the 103.40 resistance area, which is a pivot zone for the pair.

Overall, as long as the pair is trading above the 102.00 support area more gains are likely in the pair moving ahead.

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