GBP/USD back into overbought
GBP/USD has been relatively choppy over the past week, despite the clear downtrend in play. The four-hour chart shows the two retracements we have seen in that time and crucially, both have created consecutive lows and lower highs.
We are once again seeing the pair back into overbought territory on the stochastic oscillator and given the bearish trend, we seem likely to move lower once more in the near future. Given that we have not hit any notable resistance levels this morning, there is no signal that the move lower would come from here.
However, a closed hourly candle below $1.3904 would provide a bearish signal for another move back to $1.3878 and $1.3841 support levels.
Alternately, a break above $1.4042 would be a warning sign that we could see a more extended move higher, towards $1.4063 and $1.4080 resistance.
USD/JPY breaking higher
USD/JPY saw a strong rally yesterday, following on from a flag continuation pattern. We are seeing this move extended today, with a period of overnight consolidation giving way to what looks like another rally.
With price currently breaking through to new highs for the day, it seems like the consolidation is over and thus a renewed bullish view is in play.
The main resistance level in view is ¥114.87, while an hourly close back below ¥113.70 would negate this current bullish view with subsequent support levels at ¥113.37, ¥113.20 and ¥113.05.
USD/CAD bearish amid early bounce
USD/CAD sold off heavily yesterday, finally breaking out of almost a week of consolidation. This continues the downtrend for the pair, driven by rising crude prices.
Early strength this morning is seen as a retracement of yesterday’s move and thus it seems highly likely to be sold into once more. With that in mind, a bearish view remains unless we see a close back above C$1.3587. Near-term resistance levels are C$1.3457 and C$1.3481, with support at C$1.3386 and C$1.3353.