EURUSD (1.1079) has been trading flat since mid-June with price seen bouncing off the 1.10 support and 1.120 resistance. Last week’s retest to 1.123 – 1.1214 marks a correction to the declines with prices re-establishing resistance near 1.123 – 1.1214 which previously served as support. A breakdown below 1.105 – 1.10285 is required for EURUSD to continue its declines to the downside. Support near 1.0810 – 1.075 remains the next likely target on a confirmed breakout.
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EURUSD seen testing support at 1.105 – 1.10285
USDJPY (102.36) has posted a higher low last week with price seen clearing the 101.5 level. Still, the support zone near 103.15 – 101.5 remains a key level that needs to be cleared to ascertain further upside in USDJPY. Resistance is seen at 105.6 – 106.20 which could be targeted to the upside. In the near term, USDJPY is likely to continue trading within the mentioned levels with the further directional bias being established on a breakout from either of the two levels mentioned. USDJPY is also in the process of forming a possible head and shoulders pattern with the left shoulder and the head being established near the 106.20 price level. Therefore, a reversal near this resistance level could see USDJPY slide back to 101.5 support and break down from this support could see prices declining further.
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USDJPY range bound within 101.5 – 105.5
GBPUSD (1.2989) turned weaker after the BoE’s easing policies. However, the declines have been limited in nature with the price still seen trading above the previous lows formed near 1.28. Price action in GBPUSD shows the bearish pennant pattern currently with price breaking down below 1.312 indicating that further declines could see GBPUSD test the previous lows near 1.28. A break below 1.28 could extend the declines further with GBPUSD likely to resume its bearish trend thereafter. However, the Stochastics are showing a higher low which could signal a potential bullish divergence. Watch for any retracements to 1.312 off the 1.28 lows.
