EURUSD,USDJPY, GBPUSD – Technical Review

EURUSD plunged to 1.2320

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EURUSD plunged on Wednesday after comments in the Wall Street Journal from ECB Executive Board member Benoit Coeure, who hinted that the ECB is poised to embark a large-scale asset purchases centered on government bonds. The move was halted by our support-turned-into-resistance level of 1.2410 (R1). The pair declined even more after the FOMC decision and Fed Chair Janet Yellen’s press conference. EUR/USD found support at 1.2320 (S1) where it gyrated during the early European hours Thursday. Looking at our short-term momentum studies, the RSI found support at its 30 level and is pointing up, while the MACD fell into negative territory but shows signs of bottoming and is willing to turn around. These signals suggest that we may see small upward movement before the bears prevail again. On the daily chart, the rate is still printing lower lows and lower highs below both the 50- and the 200-day moving averages and this keeps the overall path to the downside.

• Support: 1.2320 (S1), 1.2300 (S2), 1.2250 (S3)

• Resistance: 1.2410 (R1), 1.2450 (R2), 1.2470 (R3)

USDJPY above 117.35 again

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USDJPY firmed up on Wednesday and broke above the resistance-turned-into-support hurdle of 117.35 (S1). The move was stopped a few pips below the 119.10 (R1) resistance line and is testing that level during the early European hours. Looking at our short-term momentum signals, the RSI found resistance just above the 50 line and moved lower, while the MACD bottomed, crossed above its trigger line and is moving towards its positive territory. The mixed momentum signs point to a halt in the advance, at least temporarily, and I would wait for a break above 120.00 (R2) to get confident for further advances. As for the broader trend, the price structure is still higher highs and higher lows above both the 50- and the 200-day moving averages and this keeps the overall path of the pair to the upside.

• Support: 117.35 (S1), 115.45 (S2), 114.700 (S3)

• Resistance: 119.10 (R1), 120.00 (R2), 121.85 (R3)

GBPUSD lower on heightened risk on growth and inflation

 

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GBPUSD declined sharply on Wednesday despite the strong labor data. The plunge came after the BoE minutes of its early December policy meeting revealed that the majority of MPC members saw heightened risk that growth may soften more than expected or that inflation may stay below target for longer than expected. The rate declined further following the FOMC meeting but the move was halted by the 1.5550 (S1) support area. With no clear trending direction on the 4-hour chart, I would adopt a neutral stance as far as the short-term picture is concerned. GBP/USD is in a consolidative mode since early November, although the price is more likely to trend down than up. As for the broader trend, I still believe that as long as Cable is trading below the 80-day exponential moving average, the overall path remains negative.

• Support: 1.5550 (S1), 1.5500 (S2), 1.5420 (S3)

• Resistance: 1.5655 (R1), 1.5740 (R2), 1.5800 (R3)

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