The euro is pulling back a bit here, with trend-line support seen as important for the near-term outlook. Aussie and Kiwi remain targets for sellers. Sterling and related crosses are putting in patterns which could soon get them moving.
Highlights:
- EUR/USD pulling back to trend-line support off the month-low, needs to hold to keep near-term constructive
- GBP/USD is up against a long-term trend-line, horizontal resistance, while AUD/USD & NZD/USD remain vulnerable
- A few GBP-crosses gearing up for price moves; GBP/JPY, EUR/GBP & GBP/AUD in focus
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EUR/USD is currently trading back below big support around 11876 (2010 low), but has trend-line support not far below running higher off the monthly low. Stay above and the euro remains bullish, fall below and the dynamic shifts towards a deeper decline.
EUR/USD: Daily
GBP/USD is pressing up against resistance by way of an important trend-line running down off the 2014 high, in addition to horizontal levels created not long after ‘Brexit’. How it reacts here will be critical for cable’s outlook. A rejection will shift focus back lower, while a push on through could see 13600 or higher challenged.
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GBP/USD: Daily
AUD/USD and NZD/USD both remain in firm downtrends. Aussie has the most bearish look as it turns down from resistance around 7640. On further weakness, looking for the trend-line off the January 2016 low. In regards to kiwi, the downtrend sequence is still very much alive, with another possible bear-flag forming on the 4-hr chart.
AUD/USD: Daily
We looked at a few different cross-rates, but much of the focus was on a few GBP-crosses. GBP/JPY rejected a breakdown yesterday on ‘Brexit’ headlines, and continues to hold big support. The chart in recent weeks is starting to take on the shape of a symmetrical triangle, or ‘pennant’. It will need a little more time, but could have big implications once it breaks out, especially if in-line with the upward trend prior to its development. In reverse, unsurprisingly, we could see a big move out of EUR/GBP with it also possibly forming its own symmetrical triangle. It’s very near an important trend-line dating back to ‘Brexit’. A break below will likely set into motion downward momentum. GBP/AUD is currently in the process of breaking a trend-line back to July 2016 and above the May high. A confirmed breakout above 17546 then 17800 is seen as opening up a path for potentially much higher prices.
GBP/JPY: Daily
For full technical considerations, please see the video above…
---Written by Paul Robinson, Market Analyst
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