A 30 pip bounce on the GBP/USD from the 1.6900 level.

We have been monitoring the GBP/USD in anticipation of this possible bounce since the pair started to consolidate around the 1.6800 level. We also mentioned that in order to see the pair take a clear direction, we would need to see some strong fundamentals that supported the move. Today we received those fundamentals which showed that economic growth in the United States has stalled versus the better than expected consumer confidence reading out of the United Kingdom. This is what obviously caused the pair to rally and visit the so much anticipated 1.6900 level.

From now on, what we should do is monitor the pair and see how it keeps reacting to this new zone. Let us keep in mind that the current levels for Cable are historic. Therefore, we may see some profit taking or at least some kind of consolidation around this zone.

Will the EUR/USD bounce to the upside from its 4 hour 200 period EMA?

The Euro is very indecisive versus the Dollar. It first tries to head higher, but then it comes right back down to where it was.  Now it is visiting its 200 period Exponential Moving Average on the 4 hour chart, as shown below and it is trying to bounce from here to the upside. A little bit below that moving average, we have the 1.3800 level which is a round number and psychological level from where the price may also find some support and jump to the upside.

Therefore, we should be very attentive to the next moves on the EUR/USD, because we may get some very good opportunities to enter in this pair. For instance, at the moment we may get a bounce to the upside, but if we do get a breakout of the 1.3800 to the downside, then we can wait for the pullback to this same level for a possible short entry. That probable breakout to the downside can take the price all the way down to the 1.3700 level. 

Possible breakout on the EUR/JPY of the 142.00 level to the upside.

The Euro has been strengthening for today versus most of the main currencies after an inflow of safe haven capital came into the Euro seeking shelter, because of the tensions in the Ukraine. Another factor that has helped the Euro is that there is a high expectation that the inflation in the Euro Zone has risen. This implies that the European Central Bank may not need to implement more economic stimulus.

However, the Euro retraces a little bit of its gains towards the end of the American session and it stays oscillating versus the Yen just below the 142.00 level, as shown on the 4 hour chart below. We can also see on the chart that the price has created some type of bullish flag or pennant with a high probability of a breakout to the upside. Therefore, we should be attentive to a possible breakout and then the pullback for a possible long entry. 

The USD/JPY bounces to the upside from the 102.00 level.

At the beginning of the European session the Yen gained a lot of strength versus most of its major counterparts, especially versus the US Dollar. Risk aversion came into the markets after the tensions between Russia and the Ukraine rose and caused investors to seek the shelter of the Yen. The USD/JPY reached the 102.00, but it bounced from that level to the upside as the greenback tried to reclaim its ground as shown on the 4 hour chart below.

Even though the pair is trying to retrace at the moment, if tensions continue to escalate between Russia and the West during next week, then we may see a breakout to the downside of the 102.00 level. A breakout to the downside can give us a good opportunity to go short if we get a pullback after the breakout to the same 102.00 level. 

Before reaching the 0.9200 level, the AUD/USD must first break its 200 EMA 4 hour chart.

After the AUD/USD broke to the downside the 0.9300 level and pulled back to it, the pair has continued with its downtrend. On the 4 hour chart below we can see in detail the perfect price pattern of breakout and pullback during yesterday on the AUD/USD. We can also see that today the price has continued going lower and it is getting closer to the 200 period Exponential Moving Average on the 4 hour chart around the 0.9242 level.

We have been anticipating a visit to the 0.9200 level for the last few days, from where there is a higher probability of getting a bounce to the upside. But can also see on the chart that in order for the price to reach the 0.9200 level, it has to break the 0.9242 level first. We will keep monitoring this pair to see how it keeps behaving.

The US Dollar keeps strengthening versus the Singaporean Dollar.

The Singaporean Dollar has been affected recently by the fundamental data out of China, along with most of the Asian currencies and also the Asian stock markets. That is why we are seeing that the USD/SGD is staying in an uptrend and it has reached a key support/resistance level around the 1.12575. A little bit above this key level we have another great zone of resistance at the 1.2600 level, where we can also see the 200 period Exponential Moving Average and the 55 period Exponential Moving Average on the daily chart below. This confluence of moving averages plus the fact that they are almost exactly at the 1.2600 level, makes this area a great zone to consider a short entry from there. Let us wait patiently and see if the pair does visit that level.

The Euro stays weak versus the Pound.

The Euro has not been able to gain ground versus the main currencies after some rumors were spread around of a possible ECB intervention on the single currency to make the Euro weaken, but the currency remains stubbornly strong and it is not letting the inflation in the Euro Zone rise. This is why we have seen that the Euro has been trading sideways for today. The Euro versus the dollar stays oscillating a little bit above the 1.3800 level without a clear direction.

The Euro versus the Pound has reached an important support at the 0.8200 level where it is trying to stall its decline at the moment as shown on the daily chart below of the EUR/GBP. From this point on we may see a retracement to the upside, but we must keep in mind that the bearish trend stays intact; therefore, there could be a breakout to the downside a possible visit to the 0.8160 level from where there is a higher probability of a bounce to the upside.

Consolidation on the GBP/USD around the 1.6800 level.

Today it has been a calm day in the financial markets. Most of Europe was closed including the United Kingdom. That is why we have seen the Pound stay in a sideways movement versus the Dollar around the 1.6800 level. The longer the price stays oscillating around a support or resistance zone, the higher the probabilities of it breaking it.

During the last few days, the volatility on the pair has decreased, just as we see it on the daily chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/. We can see that the bodies of the candles are very small, showing us that the pair is very unpredictable around this zone.

Never the less, let us pay attention to a possible breakout on the GBP/USD of the 1.6800 level to the upside. The upward momentum can take the price to the next round number of 1.6900 or even the 1.7000. Above the 1.7000, there is a last historical resistance at the 1.7040 level.

The USD/CAD is visiting its 55 period Exponential Moving Average on the daily chart.

The US Dollar has been gaining ground versus the Canadian Dollar and it has reached the 55 period EMA on the daily chart as shown below. A little bit above the 55 EMA we also have the 200 period Exponential Moving Average on the 4 hour chart around the 1.1027 level. This EMA confluence on different timeframes is what is holding the price at the moment around that zone.

We have not seen a significant bounce to the downside from this level and the 1.1000 has become its most important support. If the price does break above the 1.1027 level, then we should wait for a pullback to this same area for a possible long entry. To the upside, its next resistance would be the 1.1100 level.

The USD/CAD bounces to the downside from the 1.1000 level.

The US Dollar tried to continue strengthening versus the Canadian Dollar and it even broke the 1.1000 level, but the upward momentum was not enough to keep the prices above the key round number and it created a doji with a long upper shadow, as shown on the one hour chart below. That doji with the long upper shadow was an indication that the uptrend was losing steam around this zone, and then we see a steep drop to the 200 period EMA, which also coincides with the 55 period EMA on the daily chart.

This confluence of EMAs around the 1.0972 area has been acting as a strong support zone. A breakout to the downside of this zone and then a pullback to it can give us a good opportunity to go short from there.

Attention to a potential bounce on the AUD/USD from the 0.9500 level.

The Australian dollar holds on to its profits versus the U.S. Dollar and stays oscillating around the 0.9400 level. We can call this area a consolidation or resting point for the pair on its journey to the 0.9500 level. A first visit to the round number of the 0.9500 level, can give us a good bounce to the downside. Attention to this bounce, because it could represent a 40 to 50 pip move.

Besides the 0.9500, we can also see the 76.4% Fibonacci Retracement, as shown on the chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/ , which can also hold the price there on its first visit. We keep repeating the phrase: “first visit”, because it is important that we catch the first bounce, which is the one that statistically has more probabilities of making a bigger move. After the first bounce anything can happen. 

Attention to the USD/CAD at the 1.1000 level.

As we can wee on the 4 hour chart below of the USD/CAD, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/, The United States Dollar has strengthen versus the Canadian Dollar and has reached its most recent high of the 1.0983. Actually, the US Dollar has been rallying today due to the fact that the fundamental data out of the US has come out in line or better than expected. If the USD/CAD continues rallying during the next week, we may see a visit to the 1.1000 level, which is an important round number and psychological zone from where the pair may bounce to the downside. However, if the pair breaks this level and continues going higher, then it may reach the 200 period Exponential Moving Average from where a retracement is more feasible.

And the Euro has finally reached the 1.3900 level versus the Dollar.

We have been anticipating this visit of the EUR/USD to the 1.3900 level since the pair reached the 61.8% Fibo. We should notice that around the 1.3900 level we also have the 76.4% Fibonacci Retracement, which has contributed to the price stalling at that area. On the daily chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/, it seems like the price wants to bounce to the downside from this level, but what the price has really done is consolidate just below the 1.3900.

The pair is clearly overbought and prone for a correction at any moment. That is why there is a good probability of prices bouncing to the downside from here. But we must be objective and realize that the upward momentum stays strong and it could also break this zone to the upside.

The EUR/USD has reached the 61.8% Fibonacci on the daily chart.

The Euro holds on to its gains versus the dollar at the 61.8% Fibonacci Retracement level of the drop from March 13^th to April 4^th. After reaching and bouncing from the 1.3700 level, the pair has been steadily moving up until now when it has reached the 61.8% as shown on the daily chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/, around the 1.3853 level.

From this point on we may see a bounce to the downside, but there is a higher and better probability of a bounce to the downside from the 1.3900 level, being this a round number and a psychological zone. Besides, we also have the 76.4% Fibo around the same zone which can act as a good resistance level. Therefore, a short position at the 1.3900 level has a higher probability of working than at the current levels of the EUR/USD.