EURGBP Looks Set For More Gains

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The British pound seems to be getting hammered after the release of the UK Nationwide Housing Price Index (HPI). The market was expecting a rise of 0.5% this time around. However, the outcome was softer than expected, as the UK HPI registered a reading of 0.1%. This is weighing on the British pound bulls, as the GBPUSD pair was seen trading lower and the EURGBP pair traded higher. The EURGBP pair approaching a critical resistance level, and if buyers manage to pierce the same, then more gains are likely in the pair.

Technically, there is a major bearish trend line connecting previous swing highs. The mentioned trend line is now coinciding with the 38.2% fib retracement level of the last down-move from the 0.8034 high to 0.7873 low. If the pair manages to clear the trend line and resistance level, settles above the same, then a run towards the 61.8% fib level is likely in the short term. It is even possible that the pair might trade back towards the previous high of 0.8034. However, we need the fundamentals in the Euro zone to align with the situation.

EURGBP 07.31.2014

The RSI on the daily chart is getting closer to the 50 level, which is matching the trend line break area. So, if the daily RSI breaks up, then there are chances that the pair might follow as well. So, buying with a break looks like a good deal moving ahead.

Alternatively, if the pair fails to break the mentioned resistance level, then a move back towards the 0.7910-00 support area is possible, which might protect the downside in the pair.

USDJPY: More Gains Favored As It Clears An Important Resistance Zone

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The US dollar surged higher yesterday after the release of the ADP employment change figures and the US GDP data. The earlier one registered one more reading above the 200K mark, and the latter one surprised with a solid reading of 4%, beating the expectation of 3% growth rate. This ignited a sharp rally in the US dollar. One of the biggest gainers of the day was the USDJPY pair, as it climbed above the 102.60 level to challenge the 103.00 level. The pair looks like retracing some of the recent gains, which can be seen as a buying opportunity.

Technically, there was a major resistance around an important confluence area of a bearish trend line on the daily chart, 100-day moving average, 200-day moving average and 38.2% fib retracement level of the last drop from the 104.11 high to 100.81 low. The pair managed to break the mentioned confluence area yesterday and closed above it. This particular break can be seen as very crucial, as it opens the door for more gains in the pair. The pair did climb yesterday close to the 103.00 level, but failed to close above the 61.8% fib level. So, a short-term pullback from the current levels cannot be denied. In that situation, the pair might fall closer to the broken resistance zone. The 102.40-20 area can now be seen as a major support area.

USDJPY 07.31.2014

The RSI on the daily chart is around the extreme levels, which increases the possibility of a correction in the short term. The US initial jobless claims number and Chicago PMI data will be published later today, which might act as a catalyst for the pair.

USDCAD Approaching A Major Resistance Zone; Pullback Likely

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The Canadian dollar has lost a lot of ground against the US dollar in the last few days. The USDCAD pair recently traded as high as 1.0868. However, we need to be very careful moving ahead, as the pair is approaching a major resistance area, which might result in a pullback in the pair. There are also major risk events lined up later during the day. So, we can say that the US dollar is at major risk of a correction against the Canadian dollar in the short term.

Technically, there is an ascending channel formed on the 4 hour chart for the USDCAD pair. The channel resistance currently lies around the 1.0880 level, which also coincides with the 76.4% fib retracement level of the last drop from the 1.0960 high to 1.0620 low. So, the 1.0880 holds a lot of importance for the pair, and if the pair trades closer to the mentioned level, then it might struggle to trade above it. In that situation, the pair might drop lower and test the channel support area, which is currently around the 1.0780 level. One more important thing to note here is that same level acted as a barrier earlier as well, so, it might act as a pivot zone moving ahead.

USDCAD 07.30.2014

The RSI on the 4 hour chart is around the extreme levels, which increases the possibility of a correction in the short term.

So, we need to keep an eye on the channel resistance area around the risk events like the US GDP and the fed interest rate decision. The chance of a break above also cannot be denied considering the economic releases that are lined up.

US Dollar Likely Heading Towards A Major Resistance Against The Swiss Franc

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The US dollar is trading higher against the Swiss franc, as the US consumer confidence data which was released yesterday jumped sharply. The US consumer confidence registered a reading of 90.9, which is a 7-year, beating the expectation of 85.3. The outcome ignited in a rise in the US dollar, as the EURUSD pair traded lower and the USDCHF pair jumped higher to record a new monthly high. The USDCHF pair traded as high as 0.9074 yesterday. However, it looks like that the pair is heading towards an important resistance area in the short term, which can cause a pullback in the pair.

Technically, there is a monster bearish trend line on the daily chart for the USDCHF pair, which now coincides with the 76.4% fib retracement level of the last major drop from the 0.9248 high to 0.8700 low. So, if the pair pushes a bit higher from the current levels and closer to the mentioned trend line, then the US dollar sellers might appear to contain the upside in the pair. The most important point to note from the charts is that the daily RSI is around the extreme levels, which can result in a sharp pullback in the USDCHF pair.

USDCHF 07.30.2014

If at all the pair manages to clear the 76.4% fib level, then a run towards the last high of 0.9248 is possible. On the downside, initial support can be seen around the 0.9000 level, which acted as a resistance earlier and might act as a support moving ahead.

There is an important risk event lined up later during the New York session – the Fed will announce the interest rates along with the taper details. So, the US dollar might move a lot during this particular event.

Euro Looks Like Topping Against The New Zealand Dollar

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The Euro is trading higher against the New Zealand dollar in the last few days. However, EURNZD buyers need to be very careful moving ahead, as the pair is likely heading towards a monster resistance zone, which could act as a barrier for the Euro buyers and might result in a pullback. Moments ago, the Spanish retail sales data was published by the National Institute of Statistics. The forecast was slated for a 1.1% rise in June 2014. However, the outcome missed the expectation and registered a rise of only 0.2%. The reaction from the Euro traders was mostly muted, but the EURNZD pair might react sooner or later.

Technically, there is a trend line on the 4 hour chart for the EURNZD pair, which has held the upside in the pair on a few occasions. The most important point as of now is that the same trend line is meeting around the 50% fib retracement level of the last major drop from the 1.62009 high to 1.5412 low. So, the 1.5800 resistance area holds a lot of importance, and it is very likely that the Euro buyers might would find it hard to break the mentioned resistance zone. If they somehow manage to do so, then a run towards the 61.8% fib level is possible in the short term.

EURNZD 07.29.2014

However, the chance of a failure around the trend line resistance area is more compared to a break higher. If the pair moves lower, then a test of the 200 moving average on the 4 hour chart is possible in the short term.

Overall, as long as the pair is trading below the trend line a short-term correction cannot be denied.

GBPUSD: 1.6980 Support Holds Key In The Short Term

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The British pound is trading lower against the US dollar. Yesterday, the GBPUSD pair managed to gain bids and trade higher, but later lost most of the gains. The pair is struggling to break the 1.7000-10 resistance area, which is acting as a hurdle for the pair. There is also a strong support forming around the 1.6980 level, which is protecting the downside in the pair. However, if the mentioned support level is breached, then more losses cannot be denied in the pair.

There is a bullish trend line formed on the hourly chart for the GBPUSD pair. The pair as of writing is testing the trend line support area at 1.6980. However, the positive point to note from the charts is that the hourly RSI is just flirting around the 50 mark, and if it manages to settle above the same, then a short-term bounce is possible in the short term. Alternatively, a break below the 50 mark might encourage the British pound sellers. In that situation, the pair might break the trend line support area and challenge the 1.6960 low. Any further losses could take the pair closer to the 1.6940-30 support level.

GBPUSD 07.29.2014

There are a few economic releases scheduled in the UK later during the London session, including the mortgage approvals data, mortgage lending, net lending to individuals and BOE credit limit figures. Moreover, the MPC member Broadbent will also be speaking around the same time. So, there is a chance of swing moves in the GBPUSD pair.

Overall, there are several supports on the way down for the pair, and a break below the trend line looks a short-term possibility.

AUDNZD Looks Set To Clear 1.1015 High

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The Australian dollar is trading a touch higher against the New Zealand dollar. This has more to do with the New Zealand dollar weakness compared to the Australian dollar strength, as the AUDUSD has also declined recently. It looks like that the RBNZ intervention card played out well, as the New Zealand dollar has moved a lot lower against most of its counterparts, including the Australian dollar. The AUDNZD pair has climbed recently, and it looks like that the pair might continue surging higher if the New Zealand dollar keeps declining.

There is an uptrend channel forming on the 30 minute chart for the pair. As of writing, the pair is testing the channel resistance trend line which is also coinciding with the 76.4% fib retracement level of the last drop from the 1.1014 high to 1.0971 low. The RSI is also approaching the extreme levels, so the pair might dip a few pips from the current levels before it can continue trading higher. If the pair breaks higher, then a break of the previous high at 1.1014 is possible in the short term. A break above the same might expose the 1.1035 high moving ahead. The pair is trading above the 100 moving average on the 30 minute chart, which is a positive sign.

AUDNZD 07.28.2014AUDNZD, A

Alternatively, if the pair fails to trade higher and breaks the channel support trend line, then a test of the 100 moving average would be on the cards. Any further losses should find buyers around the 1.0968 low, which is a critical short-term support level and must hold if the pair has to continue trading higher.

Overall, buying dips look like a good option moving ahead.

Euro Might Correct In The Short Term

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The Euro moved lower against the US dollar during this past, and traded as low as 1.3421. The EURUSD pair is currently consolidating in a range of 15 pips. There is a chance that the pair might retrace from the current levels, as it has already moved a lot in the recent days. Moreover, the hourly RSI is also around the extreme levels, which means that there might be a retracement sooner or later.

There are two trend lines formed on the hourly chart for the EURUSD pair. First one has managed to hold the downside on a couple of occasions, and second one can be considered as a bearish trend line, as it has held the upside. If the pair manages to retrace from the current levels, then it might move closer to the 38.2% fib retracement level of the last drop from the 1.3475 high to 1.3421 low. It is also possible that the pair could test the 50% fib level before sellers appear again. Any further strength should be limited by the highlighted bearish trend line.

EURUSD 07.28.2014

Alternatively, if the pair fails to trade higher and breaks the 1.3421 support level, then a test of the all-important 1.3400 level might be on the cards. Moreover, the 1.3380 level is also very critical, and the Euro buyers might appear around these levels to hold the downside in the pair.

The US services PMI and pending home sales data will be published later today. The Euro’s fate in the short term depends a lot of the upcoming economic data. Overall, a short-term correction is a possibility unless something emerges as a market moving event.

GBPAUD Might Retrace Before Heading Lower Again

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The British pound traded lower against the Australian dollar earlier during this week. However, it looks like the pair is stabilizing now and might correct higher from the current levels. The UK Gross Domestic Product was released by the National Statistics earlier during the London session, which came in line with the expectation. The report published mentions that the UK GDP increased by 0.8% in Q2 2014, the second consecutive quarter on quarter increase of 0.8%. The British pound was seen trading a touch higher after the data release.

There was a major bullish trend line for the GBPAUD pair on the 4 hour chart, which was breached earlier during this week. The pair fell sharply after the break, and traded close to the 1.8010 support level. Currently, the pair is flirting with the 61.8% fib retracement level of the last major move higher from the 1.7822 low to 1.8373 high. It is very likely that the pair might bounce from the current levels, and trades closer to the broken trend line. If that happens, then sellers might appear around the 1.8140 level. The most important thing to note here is that the 200 moving average on the 4 hour chart also sits around the mentioned level.

GBPAUD 07.25.2014

Alternatively, if the pair fails to trade higher and close below the 61.8% fib level, then it might call for a test of the previous low. The RSI is bouncing from the extreme levels, and that is the reason why the chance of a short-term correction is more compared to a break lower.

Overall, as long as the pair is trading above the 1.8020 level, then it might correct and trade closer to the 200 moving average (4H).

Euro Likely To Trade Higher In The Short Term

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The Euro managed to find buyers around the 1.3440 support level against the US dollar. The Euro zone manufacturing and services PMI which were released during the yesterday’s London session came better than expected and ignited a solid bullish momentum for the EURUSD pair. The pair traded higher close to the 1.3490 resistance area where sellers appeared again. It is under retracement as of writing, and waiting for the economic releases lined up later today.

The upside in the EURUSD pair yesterday stalled right around an important bearish trend line on the 4 hour chart. However, there is a monster bullish candle formed on the hourly chart, which might encourage the bulls in the short term. Currently, the mentioned trend line is also coinciding with the 23.6% fib retracement level of the last down-move from the 1.3639 high to 1.3437 low. So, a break and close above the mentioned trend line might call for more gains in the pair moving ahead. Initial resistance can be seen around the 38.2% fib level at 1.3515, followed by the 50% fib level at 1.3540.

EURUSD 07.25.2014

Alternatively, if the pair fails to break the bearish trend line and moves lower again, then the 1.3440 support level could hold the downside in the pair. A break below the mentioned level might ignite more losses in the EURUSD pair, which could take it towards the 1.3400 level.

The hourly RSI is bouncing from the extreme levels, and it is likely to continue gaining momentum. There are few economic releases lined up later during the London session, which might act as a catalyst for the pair in the short term. The bottom line is that the chance of pair trading higher is more moving ahead.