Windsor Brokers - Short Term Technical Analysis for Majors (07:00 GMT)

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EURUSD remains unchanged trading sideways between 1.3720 and 1.3665. This is causing the price to trade at the 55 and 20 moving average on the 1 hour chart. Overall the dollar remains strong on expectations of a further reduction in US monetary stimulus. However we expect limited action as many markets are still on Holiday

Res: 1.3720, 1.3750, 1.3785

Sup: 1.3665, 1.3645, 1.3620

Sterling did produce some action today as we saw it break its first resistance level 1.6370. It continued its rise to test the next resistance level 1.6400 but failed to break it and retraced. This was a good sign for the bulls and outlook will remain upwards if it stays supported at 1.6320 (today’s pivot point). However generally there is no trend formation on the H1 chart and we still consider it to be range mode

Res: 1.6400, 1.6440, 1.6480

Sup: 1.6320, 1.6285, 1.6250

Most currency pairs have fallen in range trading mode during this thin volume holiday period. However the USDJPY is the exception as we see a clear upward trend formation as it continues to break resistances and achieve new highs not seen since 2008. It recently broke 104.40 and 104.60 to achieve new high at 104.80. Next target is 105. On precautionary note we see the RSI above the 70 level indicating we might see a brief retracement from these overbought levels before we continue to go up on the H1 chart

Res: 105, 105.20, 106

Sup: 104.30, 103.75, 103.40

RSI moving horizontally indicating weak buying and selling momentum due to thin volume holiday trading. This is further confirmed as we see Gold prices are now exactly at their 20 and 55 moving averages on the 1 hour chart plus MACD is near 0 and Momentum 22 near 100 level. The current boundaries are 1215 and 1190.

Res: 1215, 1227, 1245

Sup: 1190, 1180, 1167

The Euro corrects yesterday’s fresh losses that probed below 1.36 handle and so far found support at 1.3570, just ahead of trendline support at 1.3550. Bounce to 1.3650 was capped by 4-hour 20DMA, as the price attempts to stabilize above 1.36 support. Slight positive tone exists on hourly chart, with 4-hour indicators starting to reverse that may be supportive for further recovery action. Bears are on stand-by on lower ADX timeframes, with clearance of initial barriers at 1.3650, yesterday’s high and 1.3664/75, Fibonacci 38.2% of 1.3817/1.3570 downleg / 02/01 lower high, seen as minimum requirement to spark further recovery. Strong barrier at 1.3720, Fibonacci 61.8% retracement / 20/55DMA’s bearish crossover and broken bull trendline off 1.3294 low, is seen capping upside attempts for now, with fresh bears expected to take control once corrective action is completed. The notion is supported by reversal pattern developed on daily chart, with break below 1.3570, expected to open 1.3525 higher platform / Fibonacci 61.8% retracement, reinforced by daily 100DMA. Conversely, sustained break above 1.3720 would neutralize bears and re-focus upper targets at 1.38 zone.

Res: 1.3650; 1.3670; 1.3700; 1.3720

Sup: 1.3600; 1.3570; 1.3525; 1.3500

Cable maintains negative near-term tone off fresh high at 1.6602, as fresh extension of pullback from here, reached 1.6336 so far, retracing between 61.8% and 76.4% of 1.6212/1.6602 upleg. With corrective bounce being capped for now at 1.6432 by 20/55DMA’s bearish crossover of 4-hour chart, more downside risk could be seen in the near-term, as 4-hour technicals are negative. On hourly chart, however, indicators turned neutral, as the price consolidates, but price action being capped by descending 55DMA. Preferred scenario sees fresh attempt lower, with 1.6336 seen as initial support, ahead of 1.63 zone, higher platform and 76.4% retracement. To avert immediate downside risk, regain of minimum 1.6473, 03/01 lower top / 50% retracement of 1.6602/1.6336 fall, is required.

Res: 1.6400; 1.6434; 1.6473; 1.6500

Sup: 1.6380; 1.6336; 1.6300; 1.6254

The pair trades in near-term corrective mode off fresh highs at 105.40, where double-top was formed. Fresh extension below 104 zone, where the pair previously found footstep, also marking 38.2% retracement of 101.60/105.43 upleg and bull trendline off 101.60, signals further weakness. The notion is supported by negative near-term technicals, with corrective bounce off fresh low at 103.90, so far being capped by bear-trendline off 105.43 peak at 104.60. This is seen as ideal lower top fort fresh attempt lower, with break below 103.90, expected to open 103.50, 50% retracement of 101.60/105.43 and 103.06, Fibonacci 61.8%, in extension. Conversely, extended corrective rally above 104.60, would delay bears, however, only break above 105 barrier is required to neutralize.

Res: 104.60; 104.83; 104.94; 105.43

Sup: 104.17; 103.90; 103.52; 103.06

The pair lost traction after upside rejection at 0.9000 barrier extended pullback below initial support and consolidation floor at 0.8935, with dips coming close to psychological 0.8900 support, also Fibonacci 61.8% of 0.8842/0.9003 upleg. Hourly studies are negative, with 4-hour price action losing momentum that keeps the downside vulnerable for now. Loss of 0.8900 handle to confirm bears in play for retest of downside targets at 0.8842 and 0.8819. Alternatively, Fresh strength above initial barrier and former consolidation top at 0.8975, would re-focus 0.9000 break point, also 50% retracement of 0.9165/0.8819 descend, for possible resumption of near-term recovery phase.

Res: 0.8935; 0.8975; 0.9000; 0.9033

Sup: 0.8900; 0.8880; 0.8842; 0.8819

The Euro trades in near-term consolidative phase, off fresh low at 1.3570, where the pullback found temporary support just ahead of daily Ichimoku cloud top at 1.3563 and main bull trendline at 1.3550. The price action is entrenched within 1.3600/55 range, with hourly studies in neutral mode. However, negative tone prevails on 4-hour chart that keeps the downside at risk, while the price holds below initial barriers at 1.3664/69, Fibonacci 38.2% of 1.3817/1.3570 and 4-hour 55DMA. Break lower to trigger fresh bear-leg and open next targets at 1.3525, higher platform / Fibonacci 61.8% retracement of 1.3294/1.3892 upleg, reinforced by daily 100DMA / round figure support. Conversely, sustained break above 1.3570 hurdle is required to avert immediate downside risk and allow for stronger bounce towards strong 1.3700/20 resistance zone, 50% / 61.8% retracement of 1.3817/1.3570 / bearish 20/55DMA’s crossover.

Res: 1.3655; 1.3670; 1.3700; 1.3720

Sup: 1.3600; 1.3570; 1.3525; 1.3500

Cable maintains negative tone off fresh high at 1.6602, as 4-hour studies remain negative and near-term consolidation above fresh reversal low at 1.6336, stays capped by 20/55DMA’s bearish crossover and Fibonacci 38.2% of 1.6602/1.6336 descend at 1.6435. Hourly studies are neutral, as the price action consolidates within 1.6373/1.6435 range, confirmed by yesterday’s Doji, with downside seen vulnerable while 1.6435 caps. Extension higher needs to clear key near-term barrier at 1.6470, 03/01 lower top / 50% retracement, to bring bulls in play and signal near-term ****. Otherwise, risk of lower top formation and fresh leg lower, would remain in play.

Res: 1.6435; 1.6473; 1.6500; 1.6539

Sup: 1.6375; 1.6336; 1.6300; 1.6254

The pair returns to strength, as recovery attempt from fresh low at 103.90 broke above trendline resistance at 104.45 and cracked lower top / psychological barrier at 105.00. With 4-hour indicators breaking into positive territory, near-term focus turns towards key barriers and double-top at 105.40 zone, as fresh bulls confirm higher low formation at 104 zone, strong trendline / Fibonacci support. Regain of 105.40 hurdle to signal completion of near-term corrective phase and resume larger uptrend. However, hesitation ahead of 105.40 could be expected on overbought hourly studies, with corrective action to be ideally contained above 104.50, 50% retracement of 103.90/105.12 upleg / hourly bullish 20/55DMA’s crossover.

Res: 105.12; 105.43; 105.58; 106.00

Sup: 104.82; 104.65; 104.50; 104.32

Near-term structure remains weak, as the reversal from 0.9003 upside rejection probed below 0.8900 support. Negative hourly and 4-hour indicators breaking below the midlines, favor further weakness, as the price so far retraced over 61.8% of 0.8842/0.9003 recovery rally. Clear break below 0.89 handle to open initial 0.8842 support, with risk of retesting key support and 2013 low at 0.8819, seen in extension. Key near-term barrier and breakpoint lies at 0.9000 zone and only break here would improve the structure and allow for stronger corrective action.

Res: 0.8935; 0.8975; 0.9000; 0.9033

Sup: 0.8892; 0.8880; 0.8842; 0.8819

The Euro extended near-term weakness from 1.3892 peak, to test strong support of bull-trendline off 1.2754 low and Daily Ichimoku cloud top at 1.3550 zone. The support contained bears for now, with corrective action under way, testing initial barrier at 1.3600/10, round-figure / hourly 20DMA, ahead of lower platform / Fibonacci 38.2% retracement of 1.3817/1.3552 / 4-hour 55DMA, where rallies should be ideally capped to maintain bears. Technicals on lower timeframes remain negative and favor further downside, once corrective action is completed, with slide below 1.3550 to open 1.3525, higher platform / Fibonacci 61.8% retracement of 1.3294/1.3892 upleg, reinforced by daily 100DMA and 1.3500, round-figure support in extension. Alternative scenario sees break above 1.3650 as a trigger for stronger bounce towards 1.3684, 50% retracement and 1.3716, 61.8% / 20/55DMA’s bearish crossover / broken bull-trendline off 1.3294.

Res: 1.3610; 1.3650; 1.3684; 1.3700

Sup: 1.3552; 1.3525; 1.3500; 1.3461

Cable extends near-term corrective phase off fresh low at 1.6336, after break above initial barrier and consolidation top at 1.3438, also Fibonacci 38.2% of 1.6602/1.6336, tested next target at1.6469, 50% retracement. Positive hourly studies and 4-hour indicators breaking above the midlines, support further recovery, with break above 1.6469/73, Fibonacci barrier / 03/01 lower top, is required to confirm formation of higher low at 1.6336 and trigger further gains towards 1.6500, psychological resistance / Fibonacci 61.8%. Initial support lies at 1.6434, previous resistance, reinforced by hourly 20DMA, with 1.64 zone, bullish 20/55DMA’s crossover / mid-point of entire 1.6336/1.6469 rally, expected to contain corrective dips.

Res: 1.6469; 1.6473; 1.6500; 1.6539

Sup: 1.6434; 1.6400; 1.6375; 1.6336

The pair returns to strength, as recovery attempt from fresh low at 103.90 broke above trendline resistance and lower tops at 140.83/94, to crack psychological barrier at 105.00, on extension to 105.12 so far. With near-term studies holding positive tone, near-term focus is shifted towards key barriers and double-top at 105.40 zone, as fresh bulls confirm higher low formation at 104 zone, strong trendline / Fibonacci support. Regain of 105.40 hurdle to signal completion of near-term corrective phase and resume larger uptrend. Corrective action off 105.12 was so far contained by ascending hourly 55DMA at 104.65, 38.2% of 103.90/105.12, with triangular consolidation under 105 handle being under way. Near-term bulls would come under pressure in case the price slides below 103.65 and 103.50 supports, the latter marking 50% retracement.

Res: 105.00; 105.12; 105.43; 105.58

Sup: 104.75; 104.65; 104.50; 104.32

Near-term structure remains weak, as the reversal from 0.9003 upside rejection sustains break below 0.8900 support. Negative near-term technicals favor further weakness, as the price so far retraced over 76.4% of 0.8842/0.9003 recovery rally, on extension to 0.8863 so far. Initial support at 0.8842 is under pressure, with risk of retesting key support and 2013 low at 0.8819, seen in extension, break of which to resume larger downtrend and expose the next target at 0.8769, Aug 2010low. Key near-term barrier and breakpoint lies at 0.9000 zone and only break here would neutralize near-term bears.

Res: 0.8892; 0.8910; 0.8951; 0.8975

Sup: 0.8863; 0.8842; 0.8819; 0.8800