Today was a relatively calm one in the forex markets. A theme is that the USD lost some ground, while the EUR continues to be soft. Here is a look at EUR/USD, GBP/USD, AUD/USD, USD/JPY, and EUR/JPY.
EUR/USD – Slowing down Above 1.35.
We all know EUR/USD has been bearish since failing to push above 1.40. However, in the 1H chart, the market does not look that bearish. It looks sideways, with some new bearish development this week. A break above 1.3560 exposes the 1.36 level, but a rally to 1.36 would remain in the bearish context and the focus remains on the 1.3475-1.35 area. A break below 1.3520 instead of above 1.3560 could indicate that the market is gunning for these lows without the need for a pullback to 1.36 – the 1H RSI is no longer oversold already and instead of a pullback in price, there could simply be a consolidation across (time).
GBP/USD Continues to Threaten Bullish Continuation. The 1H chart supports the case for a bullish continuation as price breaks above 1.68, a falling trendline, and the moving averages. A hold above 1.6770 should maintain a bullish outlook in the 1H chart an focus on an imminent bullish signal on the 4H chart.
The bullish attempt is challenging the falling trendline seen in the 4H chart. A break above 1.3630 at this point could clear above the trendline and the moving averages in the 4H chart. This would also expose the 1.69-1.6920 highs, and the the 1.6996, 2014-high.
AUD/USD Trading at Highs on the Year. The market has been in consolidation since April after a bullish run from 0.8660, a low made in late January. The latest price action was a rally from just above 0.92 to 0.94. From a consolidation perspective, there should be some resistance in the 0.94-0.9460 area. But if price falls and remains above 0.93, the pressure will remain at these highs, and there would be an increased threat of a bullish continuation. Below 0.93, the focus returns to the 0.92 consolidation support.
USD/JPY Breaks Down Trendline and Keeps Mode in Consolidation. The 102 level could be important. If price shows it wants to stay north of 102 this week, the focus remains on 103 in the near-term. However, inability to “capture” 102 keeps USD/JPY in a sideways market between roughly 100.85 and 103, and reflects no fuel to threaten 103. There’s simply no good directional clues until a break above 103, or below the 2014-low at 100.75.
EUR/JPY Puts in New Low. A clear break below 138 would expose the 2014-low at 136.22. There have been many bearish signals, such as a sharp retreat from 140, which was a previous support/resistance pivot. The market has signaled that EUR/JPY is bearish below 140, so watch out for traders to sell bullish correction attempts.
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