EURUSD breaks the short-term downtrend line
EURUSD continue firming up on Wednesday, breaking above the black downtrend line and confirming the morning star candle formation identified on the daily chart. However, the advance was halted slightly below our resistance of 1.2515 (R1), near the 200-period moving average. Given that the rate stays above the aforementioned trend line, I would expect further upside and a test of 1.2515 (R1). A clear move above that barrier is likely to pull the trigger for the 1.2600 (R2) area. Our short-term momentum studies maintain a positive tone as well. The RSI continued higher and now appears able to enter its overbought field, while the MACD stands above both its zero and signal lines. On the daily chart, the 14-day RSI is pointing north and could move above its 50 line any time soon, while the MACD, although negative, stands above its trigger. These signs reinforce the case that we are likely to see further upside corrective moves in the near future. Also, I can spot positive divergence between both these daily indicators and the price action, which indicates that the longer-term downturn is losing momentum.
• Support: 1.2450 (S1), 1.2400 (S2), 1.2360 (S3)
• Resistance: 1.2515 (R1), 1.2600 (R2), 1.2665 (R3)
GBPJPY falls below 186.00
GBPJPY continued its slide, falling below the 186.00 (R1) support (turned into resistance line). On the daily chart, I can spot an evening star candle pattern, which favors the continuation of the pullback. Our daily momentum studies support the notion. The 14-day RSI continued lower after exiting its oversold territory, while the MACD, although at extremely high levels, crossed below its trigger line. However, since the rate is still trading above both the 50- and the 200-day moving averages, I still believe that the broader trend is to the upside, thus I would consider the recent setback or any extensions of it as a retracement of the longer-term uptrend.
• Support: 184.00 (S1), 181.00 (S2), 178.00 (S3)
• Resistance: 186.00 (R1), 188.00 (R2), 190.00 (R3)
NZDUSD shoots up as RBNZ signals future rate hikes
NZDUSD surged yesterday after RBNZ Governor Graeme Wheeler said that more rate increases will eventually be needed. The pair rallied back above the 0.7700 (S2) to hit resistance at 0.7870 (R1). Both our near-term momentum studies entered their positive territories, but the RSI topped marginally below its 70 line and is now pointing down. As a result, I would be mindful of a possible pullback perhaps towards the 0.7760 (S1) support barrier. As for the bigger picture, the rate is back within the sideways channel between the 0.7700 (S2) and 0.7980 (R3) zones, and this keeps the overall outlook of this pair neutral in my view.
• Support: 0.7760 (S1), 0.7700(S2), 0.7660 (S3)
• Resistance: 0.7870 (R1), 0.7915 (R2), 0.7980 (R3)