The Euro ended last week in the negative territory after prices showed a strong bearish engulfing candle in the weekly chart.
Looking at the week ahead, the technical picture remain strongly bearish and a continuation lower towards 1.0910 major support is likely as long as the pair continue to trade below 1.1100 handle. In the short-term, the next level of interest stands at 1.1060 and only a break above this peak should weaken the negative outlook.
As of today, 1.1010/20 represent the hourly resistance zone for the Euro while a breakdown below 1.0970/60 support levels can trigger another sell-off in the coming hours.
Cable remain weak in both the med-term and the short-term charts, therefore, any recovery may be short-lived below 1.2270 peak.
In the coming hours, the focus should be on 1.2130 support as a daily close below it, should confirm that sellers have overtook the control of this pair again, and prices can be ready to begin a new wave to the downside.
From an intraday perspective, 1.2198 is considered as a strong barrier and at least a 4-hour close above it is needed in order to begin talking about a potential bullish reversal in the short-term.
In extension, a breakdown below 1.2130 support is likely to clear the path for 1.2090/80 area.
The Australian Dollar managed to bounce strongly during last Friday as bulls succeeded to preserve the 0.7500 psychological support.
In the meantime, the recent recovery stalled around 0.7645 hourly resistance, which keep the short-term view neutral for the time being. Meanwhile, the daily technical picture is giving more support to the positive side as the pair continue to respect the higher low structure that began from 0.7140 monthly support.
In addition, traders should be aware that volatility might increase overnight ahead the RBA meeting minutes.
Now let us review the possible scenarios for the following hours:
A move back towards 0.7575/60 support area can be the beginning of a new impulsive wave to the upside that can reach 0.7690 peak later.
In the opposite, a 4-hour close above 0.7645 resistance can be a very strong positive signal and prices can continue trading higher towards 0.7690 peak without any correction from the current levels.
The invalidation of this scenario will come with a clear breakdown below 0.7530 daily support.
After several attempts to overtake 1.3300 psychological barrier, the pair fell sharply as bearish momentum increased significantly during yesterday.
In addition, the pair break below 1.3218 hourly support registered following the FOMC meeting minutes of last week, reinforcing the bearish outlook in the short-term. In the meantime, prices are testing a major support located at 1.3100 and a break below it should lead to further decline in the direction of 1.3070 level in the coming days.
Looking at the short-term price action, 1.3185/1.3205 zone has turned resistance and we should see strong sellers around it.
To conclude, momentum indicators turned negative in this pair, which keep the outlook bearish for the week ahead with potential targets around 1.3070 followed by 1.3000 weekly support.
In the opposite, only a daily close above 1.3220 level will cancel this bearish scenario.
The pair remain bullish for the time being as long as prices keep trading above 102.80 support.
However, it is important to note that the daily trend still negative and traders have to wait for a daily close above 104.50/60 zone to confirm an effective bullish reversal in the daily chart.
As we can see, sellers continue to cap the current rally as bullish momentum faded. Therefore, another wave to the downside remain possible in the coming hours especially if prices manage to break below 103.78 support.
If the current drop happen, then we will look for support around 103.60/30 while a daily close below this zone should warn about a topping formation at 104.50 daily resistance, which can lead to a re-test of 102.80 support again.
In the flipside, a daily close above 104.50 resistance should trigger a big rally in the direction of 105.60 level.
Gold prices stabilized in the recent days after the big sell-off seen in the previous two weeks, meanwhile, as far as the Dollar index remain strong and speculation for U.S rate hike by the end of this year still high, the yellow metal is likely to remain under pressure.
Technically, the fight is taking place between 1262 barrier in the upside and 1246/41 zone in the downside, which keep the short-term view neutral for the time being.
From a wider angle, the daily trend still strongly bearish and as far as 1277 high is intact a continuation lower in the direction of $1235 seems ideal to end a bearish cycle from 1317 peak.
In the flipside a daily close above 1277 should warn about a potential reversal in gold prices, otherwise, downside risks should persist.
The Euro remain weak in the short-term and as long as prices keep trading below 1.1060 peak, downside risks are likely to persist in the coming days.
Looking at the technical picture, the pair has showed a strong bearish engulfing candle last week, which may lead to further losses that can reach the weekly support located at 1.0910 level.
As of today, 1.1027 represent the hourly resistance zone for the Euro and traders should be aware that this level could be a strong barrier in case the single currency manage to bounce during ECB press conference scheduled in less than an hour from now.
The outlook still negative in the daily chart and prices are likely to break below 1.0950 near-term support on dovish comments from ECB, in the flipside , a hawkish tone can send the Euro higher into a short-lived correction, that can find resistance around 1.1005/30 area.
To summarize, the pair is bearish and can visit 1.0910 area as long as 1.1060 peak is intact.
Cable turned neutral in the hourly chart, after prices managed to overtake 1.2270resistance zone. However, the outlook still bearish in the daily chart as long as a close above 1.2330 barrier is not happening.
In the coming hours, the focus should be on 1.2250/30 support zone as a break below it should put the pair under pressure again and we may see a re-test of 1.2197 former resistance, which may likely to turn support for the time being.
From an intraday perspective, 1.2297 is the level to watch for bulls as it represents the hourly bearish pivot in this pair. A breakout above it should add more bullish momentum to the pair and can clear the path for 1.2330 zone again; while a break below 1.2250/30 support zone as mentioned above should send cable towards 1.2197level.
The Australian Dollar rallied during the U.S trading session yesterday and prices succeeded to reach a major resistance level, which stands at 0.7730.
For the time being, the pair remain clearly overbought in the hourly chart and looking at momentum indicators, a corrective wave can send prices lower towards 0.7640 support (former resistance) before to see strong buyers again.
From a wider angle, the Aussie still bullish and can extend its rally towards 0.7770 weekly resistance as long as 0.7570 low is in place.
In the opposite, a 4-hour close below 0.7540 support should weaken this bullish scenario, while a breakout above 0.7700 handle will confirm the bullish power in this pair.
The pair traded in a choppy manner yesterday during the Canadian rate decision.
Bank of Canada decided to maintain its interest rates unchanged, which triggered a big sell-off in USD/CAD.
Prices retreated to a low of 1.3005, before to bounce back strongly above the 1.3100 handle, in addition, the pair has overtook its hourly resistance located at 1.3240 zone, reinforcing the bullish reversal scenario. Therefore, the pair is likely to trade sideways to higher today, in the direction of 1.3185/1.3200 area before to find resistance again.
1.3106 is seen as the bullish pivot in the short-term and only a breakdown below it can weaken the positive momentum seen yesterday.
In the daily chart, the pair is trading inside a wide range between 1.3300 level in the upside and 1.3000 psychological support in the downside. Consequently, we may continue to see an increase in volatility in this pair, until a clear break outside of this range bound, occur.
