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EURo to the highest since early January

EUR/USD is the pair that appears to have benefited the most from the recent market rout. Some if it may be unwinding of the Euro currency hedges, which were established during European stock market bull run. Short covering ahead of the September FOMC meeting, which will likely postpone the lift-off, is definitely a part of it.
Initial support is seen at February high (~1.1535) and then at May high (~1.1470) with the stronger one near 200 DMA (~1.13). Resistance was found at the March to August c…
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GBP/USD will remain strong

Monthly chart:
Medium-term downtrend has broken longer-term uptrend, which is marked on the chart as a trendline that supported the pair in 2009, 2010 and 2013. After trading down to below 1.50 in January, the pair reversed all sub 1.55 losses in February and even broke above the big level. At that point it looked like a bottom is in place, but another push down followed as the pair declined all the way to 1.4566. It took off from there to then ran out of puff just below 1.60.
Weekly chart:
The…
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al_dcdemo avatar
al_dcdemo 10 8月

UPDATE 4: There are few important data points coming out in the week ahead, particularly UK labour market report. US retail sales and PPI have potential to move the pair too, especially if they overshoot expectations in either direction. Support is seen in 1.5400 - 1.5425 band, before July 8th low near 1.5325. Initial resistance shall come at 1.55 and then between 1.5530 and 1.5550.

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al_dcdemo 15 8月

UPDATE 5: The pair reversed most of the last week's losses on Monday and then went pretty much sideways from there. However, higher highs and especially higher lows are noted as the pair edges towards the top of the five-week range. Despite the fact that it's still contained within the range, weekly candle body engulfs previous weekly candle body after price action sprang from the new range low last week. That looks bullish.

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al_dcdemo 16 8月

UPDATE 6: Inflation and retail sales reports will be the next pieces of the puzzle that the market and indeed the BOE will receive. The US will also release their latest inflation figures. Technically, the pair looks poised to break above the recent range top near 1.5680. Stoploss selling could propel the pair to at least 1.5750, if not 1.58. Support is seen at 50 DMA (~1.56).

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al_dcdemo 28 8月

UPDATE 7: Price action in the pair was similar to that in the Euro, even though it started from a completely different (range-bound) context. After peaking above 1.58 on Monday, the pair turned lower and traded down to 1.5325, breaking all three (50, 100 and 200) SMA along the way. However, the latter was broken only briefly and then the pair pulled back above it. Despite that, weekly candle looks bearish.

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al_dcdemo 29 8月

UPDATE 8: It's a bank holiday on Monday on the island, but the rest of the week promises to be lively as we will get the three major PMI reports from the UK and ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP reports from the US. 200 DMA has to hold if the pair is to stay in 1.53 - 1.59 range. Otherwise, retest of 1.50 in the days/weeks ahead may become quite likely.

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GBP/USD will hold onto its gains

Monthly chart:
Medium-term downtrend has broken longer-term uptrend, which is marked on the chart as a trendline that supported the pair in 2009, 2010 and 2013. After trading down to below 1.50 in January, the pair reversed all sub 1.55 losses in February and even broke above the big level. At that point it looked like a bottom is in place, but another push down followed as the pair declined all the way to 1.4566. It took off from there to then ran out of puff just below 1.60. It is poised to cl…
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WallStreet6 avatar

Another great analysis! Also included some macroeconomic situation! Great stuff and only a bit over 100 pips to go!

WallStreet6 avatar

As the GDP came on target I think that the cable may continue it's run upwards this week.

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al_dcdemo 31 7月

Thanks! Let's hope for an early Monday rally. :)

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al_dcdemo 31 7月

UPDATE 9: Among seven major currency pairs, Cable was the winner of the week. Solid preliminary GDP report was a big part in Sterling's gains, in line with the backdrop of hawkish BOE. Yet the Dollar was strong too and, thanks to the positive signal in the FOMC statement and solid Advance GDP report, the pair remained range-bound for the third consecutive week.

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UPDATE 10: Next week is the first one of the month and, as usual, it comes with plenty of economic data points. NFP will again be in the spotlight but for the British currency the first BOE meeting in the new format will be even more important. Range top is found near 1.5675. Initial support is seen near 1.5550 but the stronger one lays at the range bottom around 1.5475.

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EUR/USD to break higher

Monthly chart:
The pair has been in a downtrend since May 2014. After it broke below the longer-term trendline that supports lows of years 2005, 2010 and 2012, a series of important levels gave way: 50.0% retracement (of the 2000 to 2008 uptrend), 2012 low, 2010 low, 2005 low and 61.8% retracement. The levels were falling like dominoes before the rout finally stopped near the declining channel-line (drawn off 2008 and 2010 lows). Further support comes in at 2003 low (1.0331) and then at 76.4% re…
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al_dcdemo 13 7月

UPDATE 4: Euro gapped down 50 odd pips at the open. This was the third weekend gap in a row. It was smallest of them all and it was also the quickest one to close - in the first hour of trading. After a deal was reached between EU and Greece, the pair rallied 70 pips but stalled ahead of 1.12 and reversed from there to fall 200 pips. It appears poised to close below 100 DMA.

WallStreet6 avatar

I think this one will be the biggest miss as don't think it will move above 1.12 within a week. But very thorough analysis!

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al_dcdemo 31 7月

Thanks! Yep, more luck next time. :)

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al_dcdemo 31 7月

UPDATE 5: The week in the pair was quite volatile, yet the range was less than 250 pips. The pair continued last week's rally on Monday and extended to 1.1130 before running out of steam. It then fell for three days, setting a low just below 1.09 on Thursday. Friday was the most interesting day as the combination of weaker than expected wage data and month-end flows sent the pair to 1.1115 before it fall all the way back.

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UPDATE 6: Next week will be important as we will get the latest NFP report and both ISM Manufacturing and Non-Manufacturing PMIs from the US. 50 DMA is proving to be a formidable resistance as it held four times this month. Above that, July 10th high (~1.1215) is the next. Initial support is seen at July 30th low (~1.0890) before range support near 1.08.

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GBP/USD to remain well supported

Monthly chart:
Current medium-term downtrend has broken longer-term uptrend, which is marked on the chart as a trendline that supported the pair in 2009, 2010 and 2013. After trading down to below 1.50 in January, the pair reversed all sub 1.55 losses in February and even broke above the big level. At that point it looked like a bottom is in place, but another push down followed as the pair declined all the way to 1.4566. It reversed from there but ran out of puff just above 1.58.
Weekly chart:
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UPDATE 4: 50 and 100 DMA held the declines on two occasions in the past week and will remain the most important levels to watch in the week ahead. The pair will need to break below both averages to confirm bearish bias. If not, trading back above 1.5350 will establish bullish tone and 200 DMA, which currently sits just above 1.55, will come back into focus. If that goes, the pair is free to retest 1.58 and possibly trade up to 1.60.

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al_dcdemo 14 6月

UPDATE 5: Cable was the best performer on the week among major pairs. It gained nearly 300 pips from the open while the weekly range was about 380 pips. Most of the gains were acquired in US sessions while the pair was mostly sold in Europe. Exception was Wednesday when that pair rocketed higher despite mixed industrial production report. A lot of the strength came from EUR/GBP selling on combination of overbought technicals and safe haven flows due to the uncertainty regarding Greece.

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al_dcdemo 15 6月

UPDATE 6: There are four important UK economic events coming up in the week ahead: inflation report, jobs report, MPC meeting minutes and retail sales. On the other side of the pond we have even more important FOMC meeting and US inflation report. After strong performance in the past week, some consolidation and/or correction in the beginning of the week is the most likely scenario.

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al_dcdemo 26 6月

UPDATE 7: After fake move up in the Asian and early European session on Monday, the pair sold off strongly and started a correction which has been so far worth close to 250 pips. The pair tried to rally on Wednesday, but it turned out that the move back up to 1.58 was just a short squeeze. The rest of the week was range-bound. Weekly candle doesn't look that bearish as it retraced less than half of previous week's gains.

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al_dcdemo 27 6月

UPDATE 8: The week ahead will be important one for the pair, not just because Greek story implications for the UK but it's also that week in the month when we get PMI figures for UK's three major sectors: Services, Manufacturing and Construction. On top of that, Current Account and Final GDP will be released. Initial support is seen between 1.5650 and 1.5675 with stronger closer to 1.55 level. First resistance may come in around 1.58.

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EUR/USD parity not just yet

Monthly chart:
The pair has been in a downtrend since May 2014. After it broke below the long-term trendline that supports lows of years 2005, 2010 and 2012, series of important levels gave way, falling like dominoes: 50.0% retracement (of the 2000 to 2008 uptrend), 2012 low, 2010 low, 2005 low and 61.8% retracement, before it finally stopped near the declining channel-line (drawn off 2008 and 2010 lows). Next support comes in at 2003 low at 1.0331 and and further down 76.4% retracement just abo…
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al_dcdemo 16 6月

UPDATE 6: It will be an interesting and possibly volatile week ahead for the pair. The FOMC will meet on 16th and 17th and on the latter day they will publish their latest decision and economic projections, which will be followed by a press conference. The other main story is Greece and the Eurogroup Meetings will be watched closely. Stronger support is seen near 1.1050 (June 5th low, 50 and 100 DMA), while the weekly trendline resistance shall be found between 1.13 and 1.14.

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al_dcdemo 20 6月

UPDATE 7: It was a roller-coaster week for the pair in which both sides struggled for domination. It was the buyers who were having the upper hand most of the time, but the sellers wouldn't let them very high. The main event, FOMC meeting, left us none the wiser and the pair jumped on it as there was nothing particularly Dollar-bullish. The main thing that is holding the pair down at the moment is the uncertainty surrounding Greece.

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al_dcdemo 21 6月

UPDATE 8: Next week will kick off with the Eurogroup Meetings on Monday and there are rumours in the market that there is some kind of a deal in the making. We'll also have Flash PMIs and German Ifo Business Climate, while from the other side of the Atlantic we'll get: Existing Home Sales, (Core) Durable Goods Orders, Final GDP and Unemployment Claims. We are currently trading in the middle of ascending triangle with support near 1.13 and resistance in 1.1400 - 1.1450 band.

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al_dcdemo 26 6月

UPDATE 9: It was an odd week. On Monday, the pair was unable to rally on good prospects for a deal between Greece and its creditors. After EU welcomed Greek proposal as a "big step forward", the pair started to fall and it extended the decline by 200 pips on Tuesday. And then there was no sell-off despite renewed worries on creditors' rejection of the proposal. From there it was tight sideways trading for the rest of the week.

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al_dcdemo 27 6月

UPDATE 10: The talks will continue on Saturday and many officials are expecting a deal, while many of others are growing pessimistic. Both sides are relentless on their positions and it appears unlikely that the talks will be concluded this weekend. Initial support is seen near 50 DMA with more in 1.1000 - 1.1050 band, which includes pivotal 1.1075 level and 100 DMA. Initial resistance may be found near 1.1225.

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