Short Term Technical Analysis for Majors (07:00 GMT)
The single currency remains in a sideways mode after yesterday’s bumpy ride, with price hovering around 1.3300. Hourly structure, however, is still aligned towards the downside, as the price holds below MA’s and indicators are in the negative zone. While range floor t 1.3280 that proved to be solid support, stays intact, range-trading will remain in play, while break lower would signal a fresh direction and expose 1.3250 and 1.3200. On the upside, regain of yesterday’s spike high at 1.3370, would improve the near-term structure, but only clear break above 1.3400 to signal resumption of an uptrend from 1.2660, 2012 low.
Near-term structure maintains negative tone, as the pair, unable to regain initial barrier at 1.5900, returns to near-term base at 1.5800. Bears remain favored, with near-term studies in the negative territory, being supportive for possible slide below 1.5800 handle that will confirm break below 4-month range and open way for fresh leg lower, with 1.5750 and 1.5700 seen as next targets. Any bounce would be of corrective nature and facing strong resistance at 1.5900, 200 day MA, ahead of 1.6000, also 50% of 1.6380/1.5800, break of which is required to provide relief.
Yen continues to strengthen against the dollar, on a reversal from 90.23 peak, with initial targets at 88.00 zone being tested so far, just ahead of key near-term support at 87.78, 16 Jan low. As 87.78/90.23 rally has been nearly fully retraced, break lower remains favored for now, with notion being supported by negative near-term studies. However, corrective action may precede fresh bears, as hourly indicators reached oversold zone. Bounces are going to face good resistance at 88.90/89.00 area, where previous highs and Fib 38.2% lie, reinforced by descending 55 day EMA. Only break above 89.50 would delay immediate bears.
Near-term price action still holds above 0.9280, Fib 38.2% of 0.9109/0.9387 upleg and 55 day EMA, following pullback from 0.9387, 18 Jan high, after the pair failed to regain psychological 0.9400 barrier. The hourly structure shows neutral/negative tone, as the price moves within narrow 0.9280/0.9300 range, however, weakening 4h chart studies sees scope for fresh extension lower and test of next targets at 0.9250 and 0.9215, after psychological 0.9300 supports has been cracked. On the upside, corrective rallies face Fibonacci resistances of 38.2% and 50% at 0.9317/30, while only break above 0.9350, yesterday’s high and near 61.8% retracement would signal stronger recovery and sideline near-term bears.
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