FX snapshot – EUR/USD, GBP/USD, USD/CNH, AUD/USD

The US jobs report provides dollar weakness, which has the possibility of reversing some of the strong price action seen earlier this week. With levels clearly defined, we await confirmation.

Pound and dollar
Source: Bloomberg

NFP-driven bounce sends price up to historically important level

Yesterday’s bounce saw the $1.1045 support hold up and returned us to the $1.1115 resistance point. We have been watching these two levels for some time, so it is interesting to see this support/resistance zone actually contain price action for now. Clearly $1.1115 is a crucial marker that needs to be broken to continue the bullish momentum we have gained from yesterday’s US jobs report, and given the ascending triangle being created (higher lows, flatlining tops) I favour a break higher.

However, I will await an hourly close above $1.1115 for confirmation of the bullish outlook for the next leg higher. As with the DAX, it is worth being aware on any announcements out of Greece which have the potential to bring volatility to the euro.  

EUR/USD chart

GBP/USD bounce brings repeated tests of resistance

Yesterday’s NFP-fueled bounce has brought GBP/USD into a more bullish phase ahead of time, with the support triangle I expected to see the bounce from being some 12 points below yesterday’s low. Nevertheless we have since been testing the $1.5624 resistance point on a number of occasions and it would make sense that one of these times it will be successful in pushing through resistance.

As such, I am awaiting a break above $1.5624 upon which I would expect another leg higher for GBP/USD. Until then, I am in a more neutral phase where there is the possibility to scalp this period of sideways price action.

GBP/USD chart

USD/CNH bounces from symmetrical triangle support

The USD/CNH pair has seen price move higher from the bottom end of a symmetrical triangle that has been in play since April and initial signs are that we could see a resurgence going forward. While trendlines and patterns are fine, price action is key and as such we would need a break above CNH6.2068.

However, should that occur, it would create the basis for a week of USD/CNH strength for a move back towards CNH6.215.

USD/CNH chart

AUD/USD breaks major level, yet price now approaches a multi-year support

Yesterday saw AUD/USD all below the crucial $0.7599 support level, which has held up price on a number of occasions. However, this sell off has subsequently continued on towards the most crucial support level at $0.7533 which represents a six-year low. As such, there are two ways to play this. Firstly for a bounce higher and secondly to await a break lower. I would be happy to do either and of course the bounce would be the first port of call.

As such I am bullish for a bounce from $0.7533, which can easily be invalidated should price move even ten points below that level. Should that occur, I would be waiting for an hourly close below $0.7533 for a more bearish view.

AUD/USD chart

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