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WTI oil futures in extreme downfall; bearish and oversold

WTI oil futures for April delivery is in free-fall mode on Monday after OPEC+ meeting triggered a price war between Saudi Arabia and Russia last week.

 

Oil price opened 11% lower on Monday and at a multi-year low of 27.32, though not far from 2016 troughs.

Technically, the market is strongly oversold as the RSI is printing new lows below 30, increasing the case for a price reversal. That said, the indicator has yet to change direction and head north and the MACD continues to decelerate below its red signal line, suggesting that things could worsen a bit before getting better.

 

Below the 27.32 low, the 261.8% Fibonacci of the upleg from 50.51 to 65.61 at 26.00 could potentially halt the bears before the 24.00 barrier comes into view.

 

Should a rebound take place, with the price closing above today’s high of 33.53, resistance could emerge within the 41.00-42.53 support area, a break of which could see the re-test of the 44.00 number. Higher, the bulls would seek a closure above the descending trendline that has been capping upside corrections since January.

 

In the bigger picture, the sentiment switched to bearish following the plunge below the 2018 low of 42.53 and only a bounce back above that threshold could resume the neutral outlook.

 

Summarizing, WTI crude futures could maintain a bearish tone in the short-term. However, any negative extension could be limited as the market seems to be trading well into the oversold territory

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EURUSD rushes to 13-month peak; strongly bullish in short term

 

EURUSD surged to a fresh 13-month peak near the 1.1500 handle earlier today, continuing the aggressive buying interest that started on the 34-month low of 1.0770 on February 20. The pair seems to be strongly bullish in the very short-term after it surpassed the 1.1450 barrier. However, the stochastic oscillator suggests an overbought market and a downside correction may be on cards.

 

The MACD and the RSI are still moving higher in positive territories, signaling more gains. Also, the 20- and 40-simple moving averages (SMAs) are ready for a bullish crossover if the price continues the upside movement.

 

If buyers push above 1.1450 and the 13-month high of 1.1495, initial resistance could come from the 1.1515 mark, taken from the top on January 2019. Climbing higher, another peak from January 2019 (1.1570), could come into focus ahead of 1.1620, achieved on October 2018. Above that, a rollercoaster is expected towards the 1.1815 barrier, registered in September 2018.

 

Otherwise, to the downside, immediate support is facing near the 1.1410 inside swing. Moving lower, the 23.6% Fibonacci retracement level of the upleg from 1.0770 to 1.1495 of 1.1330 could be revisited. The next hurdles are 1.1285 and 1.1240 before the 38.2% Fibonacci of 1.1225.

 

Summarizing, the very short-term bias has turned bullish but if the price shifts above the 1.1570, the picture could turn positive in the longer timeframe as well. Though, a potential downside correction may come first before another bullish rally.

 

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EURJPY recovers losses but negative signals still present

 
EURJPY’s latest rally from a six-month low of 116.11, which recouped all of yesterday’s aggressive drop, has been capped by the 50-period simple moving average (SMA), resulting in the price returning somewhat around the mid-Bollinger band, currently at 118.32.

 

The technical oscillators also reflect a very short-term stall in the up move. The MACD, deep in the negative zone, has climbed above its red trigger line, while the RSI has stalled marginally above its neutral mark. That said, traders need to be aware of the negative signals displayed by the downward sloping SMAs.

To the upside, initial resistance could come from the 50-period SMA at 119.23 and the adjacent 119.41 swing high. Next, the 100-period SMA at 119.60 could provide some hindrance ahead of the 119.76 high and nearby 200-period SMA at 119.86. Surpassing the 200-period SMA, the upper Bollinger band at 120.31 and neighbouring peak of 120.47 could prevent the pair from seeing the 120.94 and 121.03 tops.

 

Otherwise, if sellers manage to steer below the mid-Bollinger band, the first distant support may come at 117.33. If selling interest persists, the 116.35 barrier – where the lower Bollinger band also lies – could restrict the retest of the fresh multi-month low of 116.11.

 

Overall, the short-term bias is neutral-to-bearish below the 119.41 barrier. However, a shift above 119.76 and the 200-period SMA would cement a neutral bias returning and increase the odds for more appreciation in the pair.

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EURAUD declines following the surge to 11-year peak of 1.8200

EURAUD is reversing lower following the pullback on the eleven-year top of the 1.8200 handle, which overlaps with the 261.8% Fibonacci extension level of the downfall from 1.6790 to 1.5890. The pair today has declined to the nearby 161.8% Fibonacci extension of 1.7320, with backing from the technical indicators.

 

The short-term oscillators suggest an increase in negative momentum for now. The RSI, in the positive region, is slipping towards the 70 level, while the falling stochastic has moved underneath its overbought mark.

To the downside, immediate support could come from the 38.2% Fibonacci retracement level of the bullish wave from 1.5340 to 1.8200 at 1.7115. Moving lower, the trough of March 5 at 1.6790, which lies near the 50.0% Fibonacci could be revisited. The next hurdles could come at 1.6675, from August 2019 and the 1.6590 inside swing high from January 31, before the 40-day simple moving average, currently at 1.6500.

 

Otherwise, if buyers push above the 23.6% Fibo of 1.7525, the next key level would be faced at the multi-year high of 1.8200. Climbing higher, the bulls could see the 1.8600 handle, identified by the inside swing bottom on January 2009.

 

Summarizing, the very short-term bias has turned bullish following the increase above the 1.6790 barrier on February 28, however, the momentum indicators are signaling for a possible bearish correction.

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EURUSD in quarantine between key borders; trend signals improving

EURUSD is congested between the 1.1050 and 1.1220 borders formed by the 61.8% and 38.2% Fibonacci retracements levels of the 1.0777-1.1495 upleg after last week’s free-fall.

 

From a technical point of view, the rising RSI indicates that the pair could recoup some lost ground in the short-term, though with the MACD keep decelerating below its red signal line, any upside correction is in speculation at the moment. Moreover, it remains to be seen if the 20-day simple moving average (SMA) manages to successfully cross above the 200-day SMA this time after January’s failure, increasing hopes for a trend improvement.

For now, there is a strong support around the 61.8% Fibonacci of 1.1050 and the 50-day SMA that needs to be washed out for the bears to reach the 1.1000 round level. Lower, the descending trendline from the 1.1238 high that coincides with the 78.6% Fibonacci of 1.0930 could be a reasonable barrier to watch before the focus shifts to the 2019 low of 1.0878.

 

Alternatively, the bulls should step on the ascending trendline and close decisively on top of the 38.2% Fibonacci of 1.1220 in order to re-challenge the 1.1285 former resistance region. Higher, the 1.1326-1.1355 zone could be a stronger obstacle, a break of which could bring the 1.1450 into view ahead of the 1.1500 round level.

 

Looking at the medium-term picture, the pair has no specific direction at the moment. That said, it has posted a higher high at 1.1495, and if it manages to register a higher low above 1.0777, that could be a positive signal that an uptrend may be in progress.

 

Summarizing, short-term downside risks have not fully faded in the EURUSD market, while in the medium-term the neutral outlook may remain in place. Positive trend signals in both timeframes will be closely evaluated as well.  

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Gold hovers above 2½-month high; bearish in near-term

Gold prices are advancing somewhat after the downfall towards the two-and-a-half-month trough of 1,504.52 that was posted last Friday.

 

The technical indicators are suggesting a bullish correction in the 4-hour chart as the RSI is rising, surpassing the oversold zone, while the stochastic posted a bullish crossover within its %K and %D lines. It is noteworthy, that the 40-period simple moving average (SMA) created a negative cross with the 100-period SMA, indicating a longer-term downtrend.

If the price climbs above the 1,547 immediate resistance, it would move towards the 20-period SMA, which coincides with the 1,597 barrier. Moving higher, the commodity could flirt with the 1,632 level, which is near with the bearish cross of the 40- and 100-period SMA. Clearing this zone, the price could edge higher to 1,671 mark, taken from the peak on March 11.

 

Alternatively, a drop lower again could reach the two-and-a-half-month low of 1,504.52. Below that, the yellow metal could see the 1,486 support, ahead of the 1,470 key level, identified by the bottoms on December 2019.

 

Summarizing, gold prices seem to be in a negative trend in the short-term, despite the latest upside move, and only a decisive close beneath the two-and-a-half-month bottom would endorse the bearish structure. Otherwise, an increase above the moving average lines could change the outlook back to bullish.  

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GBPUSD risks remain to the downside; reaches 5-month low of 1.22

 
GBPUSD is approaching the five-month low of 1.2200 once again, continuing the steeper declines that started after the penetration of the downward sloping channel on March 12.

 

The risk is still to the downside as the technical indicators are facing negative momentum the bearish areas. The RSI is flattening just below the 30 level, while the MACD oscillator is extending its movement beneath its trigger line, suggesting more losses in the near term.

 

Should cable tumble below the strong 1.2200 psychological level, it could reach the 1.2015 support, registered on August 2019. Slightly below this barrier, the 35-month trough of 1.1957 could attract traders’ attention before plunging to further multi-year lows.

 

Alternatively, if the pair posts some gains, the next resistance could come from the 23.6% Fibonacci retracement level of the downward wave from 1.3515 to 1.2200 at 1.2510. Above this line, the 1.2700 handle, being the 38.2% Fibonacci and the 1.2725 hurdle, taken from the inside swing low on February 27 could come next. Clearing this level, the 20-day simple moving average (SMA) at 1.2770 could halt upside movements.

 

To sum up, GBPUSD has been in an aggressive downfall over the last week, shifting the neutral-to bearish sentiment to strongly negative in the short-term. However, in the long-term timeframe, the price has been moving sideways since 2018.

 

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GBPUSD posts heavy fall within a tumble mode; new low since 1985

GBPUSD has been gradually tumbling over the last couple of weeks, dropping to levels not seen in several decades. The price is flirting with the fresh low last seen in 1985 that posted on Wednesday at 1.1450.

 

The sharp selling interest was confirmed by the long-term momentum indicators that slipped in their negative territories. The RSI is hovering near the 30 level, while the MACD is falling beneath its trigger line in the weekly timeframe. The Ichimoku lines are dropping as well, following the price action.

 

Should the market extend its losses, immediate support would come from the 35-year trough of 1.1450, before continuing the free fall towards the 161.8% Fibonacci extension level of the latest upward wave from 1.1980 to 1.3525 at the 1.1000 strong psychological level. Note that round numbers before 1.1000 could attract traders’ attention as well.

 

If the price recoups some of its losses and rebounds on the multi-year low, it could meet the 1.1980 resistance, taken from the low on September 2019. Above that, the 1.2180 barrier could come into focus ahead of the Ichimoku cloud around 1.2400. Higher still, the 50-week simple moving average (SMA) currently at 1.2710 and the 23.6% Fibonacci retracement level of the down leg from 1.7180 to 1.1450 could halt upside movements.

 

In conclusion, the sharp sell-off drove GBPUSD to a new multi-year bottom, turning the outlook to strongly bearish in the long-term timeframe. 

 

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GBPJPY’s downside risks intact, reaching multi-year low

GBPJPY’s nearly one-month decline, out of a consolidation phase, appears to have just about touched a 41-month low of 123.97, assisted by the declining Ichimoku lines and the recent bearish crossover in the downward sloping 50- and 100-day simple moving averages (SMAs).

The short-term technical indicators confirm the extremely bearish picture and currently point to more weakness in the market. The MACD, in the negative area, continues to weaken below its red trigger line, while the RSI and stochastics, despite remaining in oversold territory, show signs of slight improvement. That said, due to oversold conditions, some caution is warranted in case buyers pick up.

 

Heading back south, initial support could come from the fresh multi-year trough of 123.97, which stretches back to October of 2016. If sellers penetrate below, the 121.77 and 120.80 obstacles from August of 2012 could halt further loss of ground towards the 118.78 low.

 

If buying interest increases, first to apply the brakes is the 33-month inside swing low of 126.53. Overrunning this, the price may test the 130.42 hurdle where the red Tenkan-sen line also lies. Moving up, the high of 134.29 could apply some friction to an ascent towards the 135.95 obstacle, which is the 50.0% Fibonacci retracement of the down leg from 147.95 to 123.97. Overcoming this too, the climb may come to a halt at the swing high of 137.19 where the 200-day SMA also resides.

 

Summarizing, a bearish mode below 134.29 and more importantly below 126.53 seems to exist in the short-term, with few signals of easing soon.

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US dollar index near 17-year high as rally accelerates

 

US dollar index futures (June delivery) exploded higher in recent weeks, as the global pandemic crisis has ignited a dollar liquidity shortage. The price is now trading at three-year highs, with the structure on the weekly chart consisting of higher highs well above the 50- and 200-week moving averages (MAs), which posted a ‘golden cross’ in mid-2019. Hence, the picture is positive, and a weekly close above the almost two-decade high of 103.80 could add more gasoline to the rally.

 

Weekly oscillators concur. The RSI is ready to test 70, while the MACD – already positive – is rising above its red trigger line.

If buyers stay in control and manage to pierce above 102.25, then their next target might be the 103.80 zone, which was the peak back in 2017 and a level previously seen in late 2002. If this level is penetrated too, that could recharge the bulls, turning the focus to 105.40 next – this being the inside swing low of September 2002. Higher still, the December 2002 high of 107.30 could halt the advance.

 

If the bears take the wheel, initial support might come from the 101.20 area, where a downside break could open the door for a test of 99.35.

 

In short, the long-term outlook is positive and a close above 103.80 could reinforce that. For the bullish picture to come into doubt, the bears would need to push back below 95.35.

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EURGBP retraces from 11-year high, crawls below 23.6% Fibonacci

EURGBP seems to be correcting from the 11-year high of 0.9498, after a phenomenal two-day aggressive rally sent the pair to historic highs not seen since 2009. The move down past the 0.9148 support is currently encountering some hindrance from the upward sloping red Tenkan-sen line slightly lower.

The short-term oscillators reflect strengthening negative momentum for now. The MACD, in the positive region, although above its red trigger line, is weakening slightly, while the declining RSI has pushed out of the overbought territory. Furthermore, the falling stochastic lines have completed a bearish crossover, exiting the overbought section. That said, some caution is warranted as the 50- and 100-day simple moving averages (SMAs) and Ichimoku lines retain their upward slopes.

 

Moving south, the next support could come from the 0.9033 level, which is the 38.2% Fibonacci retracement of the up leg from 0.8281 to 0.9498. Breaching this, the 0.8978 swing low could deter the price from testing the 50.0% Fibo of 0.8889, where the blue Kijun-sen line also lies. If the bears manage to sustain the dive down, the 61.8% Fibo of 0.8745, coupled with the 200-day SMA, may prove to be a tougher barrier to overcome.

 

If buyers manage to steer the price back above the 0.9148 level (previous support-now-resistance), the next obstacle comes at the 23.6% Fibo of 0.9210 ahead of the nearly 10-year inside swing high of 0.9324. Pushing above, the 0.9411 resistance from October 2009 could hinder the price revisiting the recent multi-year top of 0.9498, just shy of the 0.9517 peak. If the bulls overcome these, the 0.9632 peak of January 2009 could draw traders’ focus.

 

The short-term remains cautiously bullish above the 0.9000 and 0.8978 marks. However, strong signals exist for a stretched correction to the downside.

 
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USDJPY bulls may not give up battle yet; look for support near trendline

 

USDJPY reversed its massive sell-off near a familiar support level of 101.17, which was active during the 2013-2016 period, and accelerated above its simple moving averages (SMA) and back towards the 111.00 area.

 

On Thursday, the pair also managed to return above the broken ascending trendline, casting doubt on the prospect of a down-trending market, while all momentum indicators further strengthened, with the RSI gaining ground above its 50 neutral mark, the MACD increasing distance above its signal line and the Stochastics jumping into the overbought area. Adding to the positive signals, the red Tenkan-sen crossed above the blue Kijun-sen, suggesting that the bullish bias is still in place.

 

On Friday the pair resumed its bearish mode, pulling back into the 109.00 zone after touching the upper Bollinger band, but the ascending trendline seems to be curbing the downside correction now.

 

Should it hold, the price could re-challenge the 111.00-111.35 nearby resistance, while slightly higher there is another tough barrier between 111.70 and 112.20 that needs to be swept away for the rally to pick up steam towards the 113.00 number.

 

Alternatively, a drop below the trendline and specifically below 109.25, which is the 38.2% Fibonacci of the 104.44-112.21 upleg, could find support near the 50% Fibonacci of 108.30 and the 200-day SMA. Falling lower, the spotlight will turn to the 61.8% Fibonacci of 107.40 and the middle Bollinger band, a break of which could confirm additional losses ahead.

 

In the medium-term picture, the outlook improved to neutral after the peak above 108.30.

 

Summarizing, USDJPY could maintain a positive bias in the short-term if the ascending trendline successfully eases today’s negative move. In the medium-term, the pair is expected to hold neutral unless it forcefully rises above its previous high of 112.21.  

 

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WTI futures turn up from multi-year low in the near term

WTI crude oil futures produced the multi-year low of 20.50 on Wednesday, pivoting up to touch the inside swing low from January 2016 at 27.54. The commodity surpassed the 20-period simple moving average (SMA), suggesting a potential bullish correction in the very short-term.

 

This slightly bullish action is confirmed by the technical indicators. The RSI is flirting with its 50 level and sloping upwards, while the stochastic is edging towards its overbought mark in the 4-hour chart. Moreover, the red Tenkan-sen line of the Ichimoku indicator is sloping north as well approaching its blue Kijun-sen line.

 

If buying interest continues, immediate resistance could come from the 23.6% Fibonacci retracement level of the downleg from 54.70 to 20.50 at 28.58, which lies near the 40-period SMA. More upside pressure could drive the market towards the 30.80 resistance, inserting into the downward sloping Ichimoku cloud. Above these levels, the 38.2% Fibo of 33.54 and the gap from March 9, 34.00-41.20 could play out next.

 

On the flip side, additional declines may send oil lower again, finding support at the 20-period SMA currently at 25.74 and the red Tenkan-sen line at 24.90 for now. Clearing these barriers, the multi-year low of 20.50 could be a crucial level for traders, before challenging the psychological mark of 20.00.

 

Concluding, in the medium-term window, the market has maintained sharp bearish sentiment since January and only a rally above 65.00 could change this outlook.

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EURUSD re-activates bearish structure in short- and medium-term

EURUSD re-activated its two-year old downtrend after forcefully clearing the 1.0777 floor last week to print fresh lows at 1.0635 on Monday.

 

The price is currently pushing efforts to recoup some lost ground but the slight improvement in the RSI and the Stochastics, which are still well into the bearish area and near oversold terittory, is not convincing yet, keeping the short-term bias negative. The downside reversal in the 20-day simple moving average (SMA) that is ready to slip back below the 200-day SMA is another discouraging signal.

 

Should the 1.0777 support level turn a tough resistance, the spotlight will shift back to the 1.0635 base. Breaking that wall, the sell-off could immediately take a breather within the nearby 1.0560-1.0500 restrictive zone from 2017 before accelerating towards a more challenging barrier around 1.0340.

 

On the upside, a steep rally above 1.1238 is required to resume hopes of an up-trending market, simultaneously switching the medium-term outlook from bearish to neutral. However, the path is hiding several obstacles that could complicate efforts. The nearest is the 1.0777 level followed by the 1.0878 and 1.0930 marks, while higher the bulls should run above the 1.1000 number and the Ichimoku cloud to gain more fuel towards the 200-day SMA and the 1.1100 level. The 1.1170 barrier may also stand tall before the 1.1238 level comes into view.

 

In brief, EURUSD resumed bearish structure both in the short- and the medium-term. Upside corrections in the short-term would not be a surprise as the pair is trading near oversold levels, though such a case is currently looking weak. 

 

 
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USDJPY develops in upward sloping channel in short term

USDJPY has been creating an upward sloping channel since the bounce off the more than three-year bottom on 101.15, achieved on March 9, in the 4-hour chart. Currently, the price is capped by the red Tenkan-sen line and finds support at the 20-period simple moving average (SMA), looking forward for a potential positive session.

 

According to the technical indicators, the RSI is heading marginally up in the positive territory, after the downfall from the overbought zone. However, the MACD is falling beneath its trigger line, remaining well above its zero level.

In the case that the pair finds crucial support at the 20-period SMA, immediate resistance would come from the latest high of 111.50, identified last week, before resting near the 112.20 – 112.40 resistance zone, which encapsulates the nine-month peak. More upside pressure could send prices above the sloping channel, testing the 113.70 barrier, from December 2018.

 

On the flipside, if the price drops below the 20-period SMA, it could challenge the 109.30 support and the 23.6% Fibonacci retracement level of the up leg from 101.15 to 111.50 at 109.07. More losses could see the 108.50 level and the 40-period SMA currently at 108.26. If the barrier fails to halt the bears, it would send the market until the 38.2% Fibonacci of 107.57, which is near the Ichimoku cloud.

 

Overall, USDJPY has been moving higher over the last couple of weeks, suggesting an upside pullback.

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AUSUSD slips marginally below 20-period SMA and 23.6% Fibonacci

 

AUDUSD has been underperforming in the past two days, breaking back below the 23.6% Fibonacci retracement level of the down leg from 0.6685 to 0.5506 at 0.5783. When looking at the bigger picture, the pair has a clear downside trend and has been moving below the short-term simple moving averages (SMAs).

Considering the momentum indicators, the RSI is lacking direction slightly below its neutral threshold of 50, suggesting that the market could keep consolidating in the near term. The MACD also supports this view in the negative territory but is currently holding above its trigger line.

 

If the price continues this downfall, it could approach the 0.5660 support, ahead of the 17-year trough of 0.5506. Even lower, the bottom from August 2002 of 0.5230 could attract traders’ attention.

 

However, a jump above the 23.6% Fibonacci of 0.5783 and the 20-period SMA in the 4-hour chart could lead the price towards the 38.2% Fibonacci of 0.5953, which coincides with the 40-period SMA. More advances could hit the next immediate support of 0.5985.

 

Turning to the medium-term picture, the market seems to be in bearish mode given that the price is trading below the Ichimoku cloud and the Fibonacci levels.

 
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USDJPY stalls at 111.70 resistance; trendline back into focus

USDJPY opened on the bearish side on Thursday after failing to lift the 111.70 resistance in the previous session, with the price dropping back below the 111.00 number and into the Ichimoku cloud.

 

The spotlight is now turning to the ascending trendline as the RSI and the Stochastics are retreating in the bullish area. The trendline had successfully supported the market over the past few sessions and if it manages to hold once again, the pair could retry to clear the 111.70 barrier in order to reach the 10-month high of 112.21 registered in late-February. Higher, the 113.00 psychological level could next come in defence, rejecting any move towards the 113.70-114.20 resistance region.

 

In case the bears win the battle with the trendline, a sharper decline could follow towards the 108.00 mark if the 50- and 200-day simple moving averages (SMA) prove easy to get through. The 61.8% Fibonacci of the 112.21-101.17 downleg is also in the neighbourhood, adding extra importance to the region. Falling lower, the price could next take a breather around the 50% Fibonacci of 106.65 before heading for the 38.2% Fbonacci of 105.35.

 

Turning to the medium-term picture, the outlook remains neutral as long as the pair trades above 108.00.

 

Summarizing, USDJPY could face downside pressure in the short-term, though only a decisive close below the trendline could raise concerns. In the medium-term timeframe, the neutral outlook could deteriorate if the pair decelerates below 108.00.  

 

 

 

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AUDUSD rebounds on 17½-year low; negative momentum fades

 

AUDUSD is unable to decisively overrun above the 38.2% Fibonacci retracement level of the bearish wave from 0.7030 to the 17½-year low of 0.5506 to post some significant gains, as positive momentum evaporates. The pair today has declined to the nearby red Tenkan-sen line and the 23.6% Fibonacci of 0.5865, with backing from the technical indicators and the easing simple moving average lines (SMAs).

Most of the short-term oscillators suggest an increase in negative momentum for now. The slightly falling RSI has just moved near its 30 level, while the stochastic oscillator is returning lower before hitting the overbought zone in the short-term. However, the MACD completed a bullish crossover with its trigger line in the negative regions, suggesting a potential upside pullback.

 

To the downside, immediate support could come from the 23.6% Fibo of 0.5865. Moving lower, the trough of the latest crucial low of 0.5506 – forming the multi-month low – could be revisited. The next hurdle could come from the 0.5270 support, taken from the bottom on August 2002.

 

Otherwise, if buyers push above the blue Kijun-sen line and the 38.2% Fibo of 0.6088, initial resistance could come from the 20-day SMA, currently at 0.6183. Climbing higher, the 50.0% Fibo of 0.6270 and the 0.6310 resistance could halt upside movements. In case of a break above these levels too, the 61.8% Fibo at 0.6450, marginally above the 40-day SMA, are coming next.

 

In conclusion, the very short-term bias has turned slightly up after the bounce off 0.5506, but if the price shifts above the six-month peak of 0.7030, the picture could turn positive in the medium-term.

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Technical Analysis – USDJPY remains above 100-SMA but in negative mode

USDJPY seems to be completing a retracement near the 107.15 support level and the 100-period simple moving average (SMA), which coincides with the 38.2% Fibonacci level of the up leg from 101.15 to 111.70 at 107.67. The downfall from the one-month high of 111.70 drove the pair inside the Ichimoku cloud in the previous days, creating a bearish crossover within the 20- and 40-period SMAs.

In momentum indicators, the RSI is pointing up after the bounce on the 30 oversold level, while the stochastic is turning higher after the positive cross within the %K and %D lines on the 4-hour chart.

Traders, however, would be more eager to engage in buying activities if the price manages to surpass the 108.34 resistance, where the red Tenkan-sen line is currently placed. If this is successfully breached, then the rally may next rest somewhere between the 23.6% Fibonacci mark of 109.20 and the 20-period SMA at 109.45, while a closure above the latter may be needed to push the price towards the 40-period SMA at 110.00. Higher, the 111.70 resistance could next come in spotlight.

 

On the flip side, the selling pressure could accelerate again if the market deteriorates below the 107.15 former strong support area. Such a move could next bring the 50.0% Fibonacci of 106.43 in focus, where any violation could trigger sharper losses probably until the 61.8% Fibo of 105.20 and the 105.15 barrier.

In the medium-term timeframe, the pair is in a neutral trend and only a rally above 112.20 – 112.40 would put the market back into a positive path.

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