The Euro/US Dollar’s recovery has taken the pair to the top of its month-long trading channel, and current levels represent a potentially significant turning point for the pair. If it makes a sustained break above its recent double-peak at the 1.3000 mark, we may expect a further rally to its previous consolidation zone above 1.3300. If, on the other hand, the Euro fails to decisively clear near-term support, we would look for a shorting opportunity below previous resistance and current support of 1.2850. The next 24 hours will likely prove important to gauge short-term direction for the EUR/USD.
The US Dollar/Japanese Yen pair is similarly at a crossroads. Having failed to close above important resistance at the 98.40 mark, the pair could potentially resume its declines through the next 24 hours of trading. The US Dow Jones’ failure to hold gains likewise leaves risks for short-term USD/JPY weakness, and it will be important to watch equity market sentiment through the upcoming Asian market session. Previous resistance and current support at 96.00 represents the next potential price floor. Of course, a clear break above aforementioned resistance at 98.50 would negate our shorter-term bearish bias. Discuss the USD/JPY in our forex forum.
The British Pound/US Dollar pair is at an important juncture through recent trading. In rallying over 1000 pips from its recent lows, the GBP/USD has positioned itself directly below previous spike-highs and potentially significant Fibonacci resistance near the 1.6400 mark. A decisive break higher would signal that a test of further resistance at 1.6650 is likely, but a near-term failure would confirm that the pair remains confined within its overall downtrend. Much as we claim for the EUR/USD and USD/JPY, the GBP/USD stands at a key technical level as far as short-term direction is concerned.
This morning we wrote, “A shorter-term USD/CHF chart shows that the pair recently broke its upward-sloping trendline, and our bias now remains firmly to the downside”. The USD/CHF has gone on to fall aggressively and broken through immediate support—confirming our bearish bias. Its noteworthy bounce at previous spike-lows and Fibonacci support at 1.1250 suggests that a very short-term bounce is likely, but overall momentum remains weighted firmly to the downside. Continued failure at previous support near 1.1500 would keep our bearish bias intact.
Yesterday we wrote that the US Dollar/Canadian Dollar pair was likely to fall to support near 1.2550, and today’s extraordinary decline clearly surpassed our bearish expectations. The USD/CAD now trades at previous resistance and the 50.0 percent Fibonacci retracement of the 1.1300-1.3020 move at 1.2160. A break below said support would likely take the pair to the 61.8 percent retracement of the same move at 1.1960—a potentially significant litmus test for the medium-term USD/CAD rally.
Much like other US Dollar pairs, the AUD/USD currently trades at important resistance. In rallying strongly off of psychologically significant support of 0.6000, the AUD/USD has now reached the top of its short-term trading channel above the 0.6700 mark. Whether or not the AUD/USD rally may continue will depend on whether the pair is able to decisively break said resistance mark, with failure likely to send the pair to previous resistance closer to the 0.6500 mark. A break above 0.6700 would restore confidence in the AUD/USD’s chances, opening up a move towards key price ceilings at 0.7000.
The New Zealand dollar finds itself in an unsurprisingly similar situation to that of the Australian dollar, with broader US dollar weakness and a recovery in risky assets leading to sharp AUD and NZD retracements. The pair currently trades near significant resistance at the top of its recent trading channel. Much like all US dollar pairs, the next 24 hours may decide direction for the next week of NZD/USD trading.