Technical Outlook for the week ahead

13 September, 2016

The Euro continue to trade sideways in the near-term, after the last ECB meeting showed that the central bank is likely to maintain the current asset purchase program unchanged until March 2017.ВВ 

The single currency reached a high of 1.1325 during last week before to retreat towards 1.1200 psychological support, which represents the 61.8% retracement of the recent recovery that began from 1.1122 low.

This level is considered as the short-term support for the pair, and as far as this level holds, the Euro should remain steady in the coming days. In the opposite, a daily close below it, should trigger another sell-off and will put the single currency under pressure again.

In extension a break above 1.1285 resistance is needed to confirm another rally in the direction of 1.1325/50 zone.

To summarize, the Euro remain one of the strongest currencies in the near-term and traders should wait for the break of the mentioned above levels, to get more clues about the future price action in the pair.

Support: 1.1200-1.1150-1.1122

Resistance: 1.1260-1.1325-1.1350

GBP/USD

The Sterling failed to overtake 1.3450 daily resistance last week as bullish momentum decreased on Friday.

Looking at the technical picture, the pair fell after breaking below 1.3290 hourly support and managed to retrace 50% of the entire rally seen from 1.3060 low.

This level stands at 1.3250 and should continue to give strong support to prices in the coming days. In the daily chart, the pair is trying to confirm a major bullish reversal as prices succeeded to overtake the bearish trend line that comes from 1.3530 peak. In addition, the British pound continue to print higher lows from 1.2798 yearly low, which keeps the short-term outlook positive.

As of now, the pair should keep trading higher in the direction of 1.3375 resistance as far as prices remain above 1.3232 low.

Support: 1.3296-1.3232-1.3126

Resistance: 1.3375-1.3397-1.3445

USD/JPY

The pair turned lower in the hourly chart as prices succeeded to break below 101.96 support.

Therefore, another extension lower in the direction of 101.20 level is likely as far as 102.65 peak is in place.

Looking at the daily chart, the pair found strong resistance near the 61.8% retracement of the entire decline that began from 107.50 peak, which stands at 104.45 level and therefore, a downside continuation is possible in the coming days.

As of now, the bullish momentum seen recently has faded and a daily close below 101.20 support would be ideal for another sell-off that can reach 100.50 major support.

In the flipside, only a breakout above 102.65 peak will weaken this negative scenario.

Support: 101.40-101.20-100.50

Resistance: 102.16-102.65-103.05

USD/CAD

The pair is trading inside a big range that stands between 1.2760 support and 1.3250 resistance.

Therefore, traders should be careful in this kind of situations. Regarding the near-term technical outlook, the pair is likely to extend its rally in the direction of 1.3155 weekly resistance.

However, a downside correction remains possible during the beginning of this week and can reach 1.3007-1.2995 support zone before to see strong buyers again for another wave higher.

Support: 1.3040-1.3007-1.2995

Resistance: 1.3102-1.3125-1.3155

AUD/USD

The Australian dollar ended last week on a negative note as prices have showed a strong shooting star reversal candle in the weekly chart.

From a technical standpoint, the pair may challenge 0.7575-0.7595 resistance zone in the coming days before the decline resume. Therefore, we expect sellers to appear from the mentioned above zone for another re-test of 0.7490 major support.

In the other side, only a daily close above 0.7657 peak will unwind the selling pressure and another jump in the direction of 0.7725 weekly resistance will be very likely.

To summarize, the daily trend is clearly bullish in this pair while the hourly trend has turned bearish, meanwhile, a clear breakdown below 0.7490 support should trigger a big drop in the pair.


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