Forex Trading Library

Weekly Forex Technical Outlook – 12th January

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EURUSD (1.089): The single currency has been trading in a range to the US Dollar for the past 15 daily sessions with no bias being established as of yet. However, the recent rally off the lower low formed at 1.0748 saw prices move back up below the resistance of 1.1 – 1.0977 forming a modestly lower high. As long as the resistance holds, EURUSD could be looking to the downside in the near term. A break below the previous low could see EURUSD test the support at 1.0642 – 1.05645 region. The downside bias is also in consideration based on the Stochastics pointing lower below the 80 overbought level and the rally retesting the breakout price from the rising price channel. Of course, a break of 1.0812 is needed in order to confirm the downside view. Alternatively, to the upside in the event EURUSD closes above 1.10, a test to the next main resistance at 1.11 – 1.113 comes into question and could potentially confirm a higher low at 1.0748 with the medium-term bias looking to the upside.

EURUSD - Price Action remains range bound
EURUSD – Price Action remains range bound

GBPUSD (1.452): GBPUSD remains in an extreme downtrend with the support at 1.463 being broken. However, there is a confluence of the dynamic trend line from the falling price channel and the median line consolidation which could see a potential move to the upside. This would, however, need to be confirmed only on a close above 1.463 resistance to establish support. In such a scenario, the upside resistance at 1.489 – 1.4951 comes into question which could mark a strong correction to the decline. To the downside, a continued move below the broken support at 1.463 could see prices eventually test 1.40 level, but for this to be validated, GBPUSD will have to no doubt move higher to establish resistance at the broken support of 1.463.

GBPUSD: Further downside in store if resistance established at 1.463
GBPUSD: Further downside in store if resistance established at 1.463

USDJPY (117.4): The Dollar/Yen has seen a strong sell off over the last week largely due to risk aversion. Price broke down below 118.85 support to form a nearly bullish engulfing pattern yesterday amid a modestly higher low being formed on the Stochastics which indicates a potential bullish divergence. A close above yesterday’s close at 117.75 is essential in order to see a move to the upside. The broken support at 118.85 could most likely come in as resistance and only a break above this support will confirm a move higher. 120.664 – 121.4 resistance level will then come into question. To the downside, a bearish continuation in prices could see 116.5 support being the next price level of interest.

USDJPY: Test to 118.85 to establish resistance is likely
USDJPY: Test to 118.85 to establish resistance is likely

USDCAD (1.423): There seems to be no respite for USDCAD as the Canadian dollar remains very weak against the Greenback. The minor consolidation near 1.388 saw prices rally with a renewed bullish momentum. Plotting the Andrews’ pitchfork, a potential failure in the median line could, however, signal a move lower with a firm test of support needed to be established at 1.388 – 1.394 region. A test of support here could signal a continued move to the upside with the potential to post new highs. Alternatively, if the support gives way, 1.342 – 1.333 support will come into question.

USDCAD: Further upside in store above 1.39 support
USDCAD: Further upside in store above 1.39 support

USDCHF (0.997): USDCHF remains consolidated within 1.008 – 0.9822 levels of resistance and support. The new rising Andrews’ pitchfork shows prices pulling back to retest the minor support after being initially rejected near 1.008. A break above this resistance is essential for USDCHF to move higher. Alternatively, in the event of a failure, a breakout from the median line could signal a move to 0.982 – 0.979 support to the downside. In most likelihood, USDCHF could continue to remain range bound within the 1.008 – 0.9822/0.979 price zone in the medium term.

USDCHF: Range bound between 1.008 - 0.982
USDCHF: Range bound between 1.008 – 0.982
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