Weekly Forex Technical Outlook – 03/May

EURUSD (1.153)

• EURUSD invalidated the head and shoulders pattern and moved higher on a strong bullish momentum
• Price broke above September 2015 highs and now targets 1.160 having cleared 1.1480
• Failure to close on a higher close could see the bearish divergence point to a strong correction towards 1.105 – 1.10285
• However, price will need to break below 1.1373 – 1.1320 support ahead of further declines
• Alternately, the bullish flag pattern that has formed could see further upside to 1.1638 followed by 1.186
• Support: 1.1373 – 1.132; Resistance: 1.1638 – 1.165

USDJPY (105.9)

• USDJPY has broken below the 108.17 – 107.69 support and continues to break lower
• Stochastics currently show a higher low taking shape, but needs to be confirmed on a daily close
• A bullish divergence here could spell a near-term correction which could be validated if USDJPY clears the previous support at 108.17 – 107.69 which could act as resistance
• Above 108.17 – 107.69, the next main resistance comes in at 111.0
• Downside continuation could see 105.30 coming in as the next level of support
• Support: 105.30; Resistance: 108.17 – 107.69

GBPUSD (1.4677)

• GBPUSD is looking to continue its bullish moment with prices closing bullish above the doji high from the previous session
• Downside is well supported by the recently broken resistance at 1.4512 – 1.4477, which could act as a strong support in the near term
• The inverse head and shoulders pattern points to a continuation to the upside with 1.4934 as the initial level of resistance that could be tested followed by 1.52
• Support: 1.4512 – 1.4477; Resistance: 1.4934

USDCAD (1.2527)

• USDCAD continues to push lower having broken below 1.26
• Support is seen near 1.26 – 1.2525, which could see further downside with the next main support coming in at 1.1955
• Resistance is seen near 1.2865 – 1.2923 which could potentially cap any upside gains
• Above 1.2923, the next main resistance is seen near 1.31360, but it is unlikely for USDCAD to break higher unless support at the current levels holds prices strongly
• Support: 1.26 – 1.2525; Resistance 1.2865 – 1.2923

USDCHF (0.954)

• USDCHF is back to the support level near 0.954, which was latest tested in early April this year
• If the support holds, USDCHF could see potential upside to 0.9848, marking a retest of the previously broken support level for resistance
• A break below 0.954 could see prices slip to 0.95, but a break below this level could see further downside extending towards 0.93
• Stochastics is currently forming a bullish divergence but needs to be confirmed with price action closing above 0.96
• Support: 0.954 – 0.95; Resistance: 0.9848 – 0.9928