Premium Daily Technical Analysis
The pair is still in a range trade but it shows some signs of bullish force behind. The fact the the market didnt break 110 ( after few attempts ) shows me that bears have not enough power to bring USDJPY down below that level. Its hard to say if it will rebound or will it stay here for few days and slightly drift down. Weekly momentum is fully oversold and it tells me, the higher prices are likely. I remain bullish but my long position is set to stop just below 110.
Cable traded in a narrow range and closed the day at 1.2466. It spiked earlier on and touched 1.2500 but sold off again. I expect the current zone (1.2550 – 1.2450) to form a channel, which could be traded on breakouts. Weekly momentum if fully overbought and lower prices are most likely to follow soon.
Stronger than expected service sector activity helped to propel GBP/USD in today's trading. This is another case when UK services PMI report has a significant impact on the British currency. Never to be ignored by serious FX traders! According to the PMI report, service sector activity accelerated at its fastest pace in 3 months.It helped to offset the negative sentiment caused by the lower manufacturing and construction PMI reports
Cable tumbled on the back of slower construction sector growth. PMI services are scheduled for release on Wednesday and if service sector activity eases alongside manufacturing and construction, GBP/USD could break 1.24 and hit a new 2 week low. Weekly momentum supports lower prices. I expect GBPUSD to print fresh lows and correct back up towards 1.2500 area.
EURUSD has been trading lower for the last 5 sessions. The pair closed the day at 1.0667. The weekly momentum indicated the price topped at the resistance 1.0850, EURUSD tumbled and didn't look back since. I still expect the price to stage some kind of correction and re-test the resistance at 1.0750.
EURUSD is ending the day below 1.07. We saw the turn in this market last week as the price printed engulfing candle at the resistance and overbought momentum. I was expecting correction to the upside in today's trading but the market just kept falling. I still expect the price to correct to the resistance at 1.0760. This will be a perfect place for bears to engage. EURUSD must be assumed bearish from now on and any rallies should be sold with targets at around 1.0500
Cable barely moved after the British PM triggered Article 50 this afternoon. The pair initially declined but then recovered losses and closed the day at 1.2440. GBPUSD, similar to EURUSD formed engulfing candle at the resistance and printed lower low below 1.2430. These are two major elements of the bearish reversal pattern already in place. I will be looking out for the final retracement to the upside to complete reversal pattern. I expect the price to rally towards 1.2500. This is 50% Fibonacci retracement and WM3 Pivot Point. It is a perfect place to enter shorts with target below 1.200 and stop losses just above the most recent high 1.2600
Tomorrow, British PM is to trigger Article 50. The times are not set but the market expects the announcement to be released between 11-12:30 GMT. The event is likely to spark some volatility in the short term. I would advise not to trade before the event but wait until the price has settled. My preference would to be sell any rallies towards end of the news.
USDSJPY responded to risk off sentiment and continued lower for another day. The pair is closing the trading day at around 110.70. There is a major resistance at 111.70 and I would expect this market to pull back towards that level in the coming days. Weekly momentum is sitting in the middle of the range and gives no confirmation of either direction. If the risk off sentiment prevails, USDJPY could make another leg down towards 109.00. If the price breaks up above 112.00 area and re-tests that level, higher price would be likely. For now USDJPY must be assumed bearish.
Notes: Cable rallied once again. It was 7th consecutive day of higher prices in this market. With Article 50 hanging over our heads, there are not many bulls yet. Despite that, GBPUSD managed to stage a good recovery after great UK CPI earlier this week. As I mentioned earlier this week, I expect Cable to reach the resistance at 1.2660 before making any reversal to the downside. Weekly momentum turned up from being oversold and it is suggesting a lot of upside potential. Only a break and a re-test of 1.2370 would suggest a large shift in the price action. For now, this market is bullish
This content is for members only