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AUD/USD and NZD/USD Eye More Upsides Above Resistance

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AUD/USD started a decent recovery wave above 0.7550. NZD/USD is also rising and it could continue to rise if it clears the 0.7100 resistance zone.

Important Takeaways for AUD/USD and NZD/USD

  • The Aussie Dollar found support near 0.7475 after a steady decline against the US Dollar.
  • There is a key bullish trend line forming with support near 0.7560 on the hourly chart of AUD/USD.
  • NZD/USD also started a decent increase from the 0.6925 zone, and it climbed above 0.7000.
  • There is a major bullish trend line forming with support near 0.7050 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

After a major decline, the Aussie Dollar found support near the 0.7475 zone against the US Dollar. The AUD/USD pair started a steady recovery after it broke the 0.7500 resistance zone.

It broke the 0.7550 resistance zone and the 50 hourly simple moving average. The pair even broke the 38.2% Fib retracement level of the key decline from the 0.7715 high to 0.7476 low (formed on FXOpen).

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An initial resistance on the upside is near the 0.7595. It is near the 50% Fib retracement level of the key decline from the 0.7715 high to 0.7476 low. A proper break above the 0.7595 and 0.7600 resistance levels could open the doors for a steady increase.

The next major resistance is near the 0.7660 level. Any more gains could lead the pair towards the 0.7700 level. Conversely, the pair could correct gains from 0.7600.

An initial support on the downside is near the 0.7560 level. There is also a key bullish trend line forming with support near 0.7560 on the hourly chart of AUD/USD. The next major support is near the 0.7550 level. If there is a downside break below the trend line support, the pair could extend its decline towards the 0.7500 level.

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GBP/USD and EUR/GBP: British Pound Could Continue To Struggle

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GBP/USD failed to clear the key 1.4000 resistance zone and corrected lower. EUR/GBP is rising and it might gain pace if it clears the 0.8600 barrier.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound failed to gain pace above the main 1.4000 resistance zone.
  • There is a major bearish trend line forming with resistance near 1.3920 on the hourly chart of GBP/USD.
  • EUR/GBP started a fresh increase after it found a strong support near the 0.8530 zone.
  • There is a short-term contracting triangle forming with resistance near 0.8595 on the hourly chart.

GBP/USD Technical Analysis

The British Pound failed to reclaim the 1.4000 handle and it started a fresh decline against the US Dollar. The GBP/USD pair broke the 1.3900 support zone and the 50 hourly simple moving average.

The pair even spiked below 1.3800 before it found support near 1.3785. A low was formed near 1.3786 and the pair recently started an upside correction. There was a break above the 1.3850 and 1.3900 resistance levels.

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The pair even moved above 1.3950, but it failed to clear the 1.4000 resistance zone. A high was formed near 1.4000 and the pair is now moving lower.

It broke the 50% Fib retracement level of the upward move from the 1.3786 swing low to 1.4000 high. It is now trading below 1.3900 and the 50 hourly simple moving average. There is also a major bearish trend line forming with resistance near 1.3920 on the hourly chart of GBP/USD.

An immediate support on the downside is near the 1.3865 level. It is near the 61.8% Fib retracement level of the upward move from the 1.3786 swing low to 1.4000 high.

A downside break below the 1.3865 level might call for a fresh decline towards the 1.3800 level. On the upside, an immediate resistance is near the 1.3920 level. The next major resistance is near the 1.4000 level.

A successful close above 1.3920 and a follow up move above 1.4000 could open the doors for a move towards the 1.4120 resistance.

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Financial Markets Turn Their Attention to Jobs Data

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Financial markets reversed their initial reaction after the latest FOMC Statement and press conference. In the two days that followed the June Fed meeting, the US dollar gained ground significantly against its peers in the developed world.

As such, the EURUSD fell from above 1.22 to 1.1850, the AUDUSD dropped a couple of hundred of pips, while the GBPUSD was strongly rejected at the 1.42. Also, stocks dropped in the United States and triggered a sharp decline in other equity markets too.

But it all lasted only two days. The week that just ended has seen the market participants changing their minds. Stocks reversed sharply, the US dollar weakness resumed, and overall risk-on outperformed.

What changed in the meantime? The answer comes from the Fed. Last Tuesday, Fed’s Chair Jerome Powell testified in front of the House Select Subcommittee on the Coronavirus Crisis, and he downplayed the hawkish statement. Moreover, Fed members held speeches the entire week, reassuring markets that the accommodative measures will remain in place for quite some time despite the hawkish dot plot.

Furthermore, the Fed still sees inflation as transitory. Food and energy prices are expected to come down past 2021, even though right now inflation exceeds the Fed’s target.

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Focus Turns to Job Creation

Now that the inflation has reached the Fed’s target, the only chance the US dollar bulls have is for the job market to show significant improvements. While the strong economic growth and improvements in the labor market should bode well for the currency and the stock market indices, further developments in the labor market will bring the Fed closer to its job creation mandate.

Therefore, the Fed’s hawkish message will have greater credibility if the US economy is able to create more jobs. We will find out as soon as next week the current state of the labor market as the Non-Farm Payrolls report for the month of May is due.

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EUR/USD Eyes Fresh Increase, USD/JPY Could Extend Losses

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EUR/USD is likely to start a steady increase if it clears the 1.1920 resistance zone. USD/JPY could extend its decline below the 110.40 support zone in the near term.

Important Takeaways for EUR/USD and USD/JPY

  • The Euro is consolidating losses above the 1.1880 support zone.
  • There is a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD.
  • USD/JPY declined below the 110.00 and 110.60 support levels.
  • There is a major declining channel forming with resistance near 110.85 on the hourly chart.

EUR/USD Technical Analysis

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After a close below 1.2000, the Euro saw bearish moves against the US Dollar. The EUR/USD pair even tested the 1.1850 support zone before starting a decent upward move.

The pair climbed above the 1.1900 resistance zone. It even broke 1.1950 and the 50 hourly simple moving average. However, the pair failed to clear the 1.2000 zone. A high was formed near 1.1974 on FXOpen and the pair corrected gains.

It tested the 1.1880 zone and it is now rising. There was a break above the 23.6% Fib retracement level of the recent decline from the 1.1974 high to 1.1877 low.

It is now facing resistance near the 1.1915 zone and the 50 hourly simple moving average. There is also a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD. The next key resistance is near the 1.1925 level.

The 50% Fib retracement level of the recent decline from the 1.1974 high to 1.1877 low is also near 1.1925. A close above 1.1915 and 1.1925 could open the doors for a steady increase.

An intermediate support is near the 1.1880 level. The next major support is near the 1.1850 level, below which the pair could drop towards the 1.1800 support.

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