The EUR/USD pair tried to rally during the course of the week, but as you can see gave back quite a bit of the gains in order to form a shooting star. Nonetheless, the market seems to be stuck between the 1.35 level as support, and the 1.37 level as resistance. The resistance above should extend all the way from 1.37 to the 1.3750 level. Ultimately though, if we can break out of that range, we should continue to make a longer-term move. If it’s to the upside, we go to the 1.40 level, but to the downside below the 1.35 level, we would head to the 1.33 region.
Market still seems like it’s essentially stuck at fair value, as the resistance above and the 1.37 level and the support at the 1.35 level continues to contain the market. With this, we don’t really see much in the way of trading opportunities unless we reach one of those extremes, as we are nowhere near at the moment. However, we will continue to watch this market going forward.
The AUD/USD pair tried to break above the 0.9450 handle, but as you can see found enough resistance above to turn things back around and form a hammer for the second week in a row.The fact that we have formed to shooting starts in a row suggests to us that the market is ready to pull back a bit, but we do see a massive amount of support at the 0.92 handle as well. Because of this, we think that any selling opportunity at this point in time will more than likely be of the shorter-term variety, as the range continues to strangle the marketplace.
If we can finally break above the 0.95 handle, that would be massively bullish. Not only would it be a clearance of a very obvious resistance area, but it would also break above to shooting stars in a row, which of course is massively strong as well. We believe that this market should continue above there are heading to the 0.97 handle first, and then to the parity level given enough time as it is a natural magnet for price based upon the longer-term chart.
Technically, the main trend is down on the daily chart. During the week-ending July 4, the trend changed to down and a closing price reversal top was formed on the weekly chart. Last week, the Aussie tested and was rejected at a retracement zone, setting up a potentially bearish secondary lower-top.
This week, look for traders to go after the low at .9328. Taking out this level will confirm the weekly closing price reversal top and reaffirm the daily downtrend.
The GBP/USD pair fell during the bulk of the week, but did get a little bit of a bounce towards the end of the 1.71 level. That being the case, it appears that the market is still ready to continue going higher, and we believe that the 1.70 level will continue to be a bit of a “floor” in this market. Ultimately, we suspect of this pair goes to the 1.75 handle, and see nothing on this chart the changes our opinion about that. Pullbacks should continue to offer buying opportunities.
The GBP/USD pair went back and forth during the session on Friday, essentially settling nothing. The 1.71 level did offer enough support to keep the market somewhat afloat though, so appears that we are simply taking a rest after the impulsive move higher. We still believe that this market goes to the 1.75 handle, so we are essentially “buy only” at this point in time, and even a pullback at this point in time would simply allow us to buy this market at a value price, at least until we get below the 1.69 level, which would be entering change in our opinion
The USD/JPY pair fell during the bulk of the week, testing the 101 level yet again. This level has been supportive for quite some time though, essentially the entirety of the year 2014. With that being the case, the market could bounce from here and that’s essentially what we expect. However, there really isn’t anything in the way of a long-term signal as far as we can see, but we certainly wouldn’t short this market. We think short-term traders will continue to move this market, thereby leaving it difficult for longer-term traders to be bothered with.
A break above the range for the Thursday session would be enough of a reason for us to start buying, as we would anticipate to see this market going to the 102.50 level. On the other hand, if we broke down we would be hesitant to sell anyway though, because we see support all the way down to the 100 handle.
Currency Data for 14th july
|2:45am||NZD||REINZ HPI m/m||-0.30%||-1.20%|
|10:00am||JPY||Revised Industrial Production m/m||0.70%||0.50%||0.50%|
|All Day||EUR||French Bank Holiday|
|2:30pm||EUR||Industrial Production m/m||0.30%||0.80%|
|10:30pm||EUR||High||ECB President Draghi Speaks|