EUR/GBP resistance turns to support for next leg higher
EUR/GBP has been moving lower following the early strength seen yesterday. However, with support now appearing at the £0.7102 level, there is good reason to think we could see another leg higher today.
The £0.7102 mark represents both the resistance level from the last leg higher, on 23 July, but also the 50-hour SMA. Thus should this level hold, we could be seeing the beginning of a move back towards £0.7161 and on towards £0.702.
Be aware, that the long-term trend is bearish and thus the bears could come back into dominance around £0.702 as this represents the 20-week SMA, which has previously been sold into.
NZD/USD at crucial resistance point following recent strength
The strength in NZD/USD over the past week has gone against the clear downtrend in play and is a threat to that trend. Now we are still far from breaking the $0.6771 level, which would be a strong indication that we are seeing a bottom at the moment. Yet the descending trendline in place since mid-May is being challenged and this could be the level needed to spark either a change in direction, or further strong buying.
This depends on how it reacts now. My preference is for a sell off, in accordance with the long-term trend, overbought stochastic and two-month trendline. Should this occur, we would be watching a lower high created, which points towards a resumption of the downtrend.
However, given the US dollar weakness seen across other markets, that view is not too strong and thus we are in 'wait and see' mode. Therefore, a bearish engulfing pattern or alike would be a good signal of a possible move back towards $0.656, yet a close above this trendline would mean a likely break above $0.6696.
Given the long-term trend, I remain bearish and am watching for possible signs of this retracement coming to an end.
USD/JPY resurgence likely to be sold into
USD/JPY has been moving higher over the last 24-hours, following the breakdown seen from last week’s triangle. However, with price having moved lower from the triangle, this provides a more bearish outlook for the time being.
The upper threshold of the triangle, coupled with the ¥123.73 horizontal resistance level provides a good area of resistance where I would expect to see selling come back to the fore. Thus I am bearish while price remains below the descending trendline (currently ¥123.86) for a move back towards ¥123.0.
I would need price to move above ¥124.2 for me to resume my bullish view.