FX Snapshot

USD/JPY finds historical support level and breaks higher in what seems like a resumption of the long-term bull trend. While NZD/USD appears to be back on track as selloff continues.

New Zealand dollar

EUR/USD breaking into crucial support zone
EUR/USD is currently breaking below the 1.1115 support level, following a deterioration in price overnight. With 1.1115 representing the 26 January low and 1.1045 the late March resistance level, I have always seen the zone between the two as a crucial support and resistance zone.

This does not mean it will always reverse price, but it has happened as often as it has passed through with ease. As such, I am watching for a possible bounce higher in this zone, which given the ascending trendline also in play, seems likely. As such, I am watching for price to reverse higher from this zone, towards 1.12. However, a move below 1.1045 would likely lead to a move to 1.0969.

GBP/USD triangle sees likely move higher for today’s session
GBP/USD has been trading within a descending triangle over the past week or so and largely this is expected to continue. The move higher from support around 1.5676 overnight has given way to a round of buying so far. This looks likely to continue until price engages with the upper trendline of the formation around 1.574. The descending triangle is, by its nature, a bearish pattern and thus I am looking for a breakout to the downside when it occurs.

GBP/USD

USD/JPY finds support and looks to move higher
The selloff in USD/JPY that took place throughout June is likely to be over in my mind, with price finally reaching the initial breakout point that instigated a substantial amount of upside volatility back on 26 May. With price having bounced higher from that 122.03 support level, the creation of a hammer following Monday’s doji points to a possible market bottom.

The stochastic has been trying to move lower again recently, but I believe this will fall short of the lows seen last week, thus meaning we would see a bullish failure swing. Given that we have been trading in a falling wedge within an uptrend, this is also a bullish signal and leads me to believe that the buyers would come back in soon enough.

As such, I am bullish for a move back to 123.20 and 123.6 as long as price remains above 122.03. From there, it would be a case of awaiting the break higher from this wedge, which I believe is only a matter of time.

NZD/USD resistance holds up
The consistent selloff in NZD/USD over the past two months has provided a great environment for trading with the trend. Yesterday’s bounce higher came following a sharp selloff which is likely to resume today. Thus I am bearish as long as price remains below 0.6815, with a return to 0.6748 the first port of call.

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