The EUR/USD halts its retracement at the 55 EMA on the 4 hour chart.

The Euro started to retrace today its recent drop versus the Dollar from the 1.3600 level as shown on the 4 hour chart below, but when it reached the 55 period Exponential Moving Average, it stopped there and tried to come back down. From this point on all we can do is wait and see if it comes back to the 1.3600 level or if it breaks the 55 EMA and continues to the 1.3700 level from where we may see a bounce to the downside. Let’s pay attention to that possible visit.

The EUR/JPY stops its decline at the 138.00 level.

We have been anticipating a visit of the EUR/JPY to the round number and psychological level of 138.00, which is just below the 200 Day Exponential Moving Average at the 138.50 level as shown on the chart below. Today we saw how the price dropped to the 138 and bounced from that level to the upside. But the price stopped at the 200 EMA again and it seems like this level is acting as a resistance zone. The bounce from the 138 level could take the price above the 200 EMA, but we would have to see some very positive fundamental from the Euro Zone in order to see that happening.

Possible bearish breakout on the NZD/USD.

The Kiwi has been falling strongly today versus the Dollar after it completed a very nicely formed pullback to the 55 Day Exponential Moving Average (purple line). We say that the pullback is nicely formed, because first of all the breakout of the 55 EMA is confirmed by a few bearish candles below that level and then the pullback is completed with some average sized candles back to the 55 EMA. We can clearly see that after the pullback the price dropped like a rock and breaks below the 0.8500 level.

From this point on a couple of things may happen. A possible scenario is that the price continues falling and reaches the 200 Day EMA (blue line) around the 0.8416 level from where it may bounce to the upside. The other thing that we may see is a false breakout of the 0.8500 and prices may try to visit the 55 EMA again or even get to the 0.8600 level again.

Breakout of the 102.00 level on the USD/JPY.

The Dollar strengthen today after the better than expected report on Durable Goods out of the United States for the month of April. This caused the USD/JPY to break above the 102.00 resistance level. Just below the 102.00 level, we have the 200 period Exponential Moving Average on the 4 hour chart, as shown on the chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/. We can clearly see that the 200 EMA has held back the price to the upside and has also contributed to creating this zone a good resistance area. Now that the price has broken the 102.00, we should wait for confirmation of the breakout, maybe by showing us two or three more bullish candlesticks and then the pullback to the same 102.00 level for a possible long entry. Let’s keep in mind that resistance becomes support and support, resistance.

The EUR/JPY closes above the 139.00 level.

Even though today we had a very quiet trading session due to the holidays in the United Kingdom and the United States, the Euro manages to stay afloat and it stalls it fall for now. We can see on the daily chart below that the EUR/JPY has closed above the key level of the 139.00, but most importantly is the fact that the most recent lows of the candles have been higher than the previous ones, this is an indication that the bears are losing interest in the pair and every time they try to bring the price down, the bulls come in and bring it right up.

During this week we do not have a lot of fundamentals scheduled out of Europe, but for tomorrow we have the speeches from Draghi, president of the European Central Bank and Kuruda, governor of the Bank of Japan. This could cause a lot of movement on the EUR/JPY, and if the speeches support the Euro, then we may see a visit to the 140.00 level.

The Euro falls for the fourth consecutive week versus the Pound.

On the weekly chart below of the EURJGBP we can see that the price has been falling at a constant rate since it broke the support level at the 0.8200. At the end of this week, it seems like the pair is going to close around the 0.8100 level. This level could act as a good support area if the fundamentals for next week help support the Euro. Therefore, we may see a bounce to the upside from that zone.

However, if the fundamentals come out worse than expected, then we may see more red on the pair and the price may break below the 0.8100 level; especially if the European Central Banks keeps talking about an interest rate cut and more economic stimulus for the European Zone. The next support level below the 0.8100 is the 0.7958.

Will the USD/JPY touch the 102.00 level?

Risk appetite has returned to the markets after the strong fundamental releases out of China, which have caused the Yen to drop versus most of its major counterparts. On the 4 hour chart of the USD/JPY we can see that the price has consolidated around the 101.77 level, but it keeps its bullish trend. Therefore, it is possible for the price to keep moving higher and visit the 102.00 level. Just under the 102.00 level, we also have the 200 period Exponential Moving Average on the 4 hour chart, which can act as a resistance along with the 102.00 level and try to halt the price there. If the price does indeed reach the 102.00 zone, then there could be a bounce to the downside and possibly a good entry opportunity.

Will the EUR/JPY close with a Hammer Candlestick Formation on the Daily chart?

A Hammer is a Japanese Candlestick Bullish Reversal Pattern, which indicates a possible change of direction or correction to the upside, especially if the lower shadow of the candlestick is relatively long and the pattern appears at a strong support zone. We can see on the daily chart below of the EUR/JPY that the pair is trying to bounce to the upside from the zone between the 1.3800 round number level and the 200 Day Exponential Moving Average. If today’s candle closes as a Hammer Formation, then there is a higher probability of seeing a bounce to the upside.

However, we must keep in mind that tomorrow’s fundamentals must support the rally; otherwise the price may break this zone to the downside. For tomorrow we have the PMIs reports out of the Euro Zone and in order to see a reversal on the EUR/JPY, the readings must support the single currency, otherwise there could be more bearish moves on the pair.

Will the AUD/USD reach the 0.9200 support level?

The Aussie continues losing ground versus the Greenback and it has accelerated its drop after breaking the 0.9300 level to the downside. We are waiting to see if the bearish momentum is strong enough to take the pair all the way to the 0.9200 level. But we must keep in mind that before reaching the 0.9200 level, the pair will have to deal with the 200 Day Exponential Moving Average, around the 0.9222 level as shown by the blue line on the chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/. 

We can also see on the chart that the 200 EMA has been a good support level in the past where the price formed a Hammer Candlestick Formation, indicating a bullish reversal trend that actually worked pretty well. Therefore, we are waiting to see if the price bounces again from the 200 EMA like it did in the past or if it goes to the 0.9200 level.

Ascending Triangle on the GBP/USD 4 hour chart.

The Pound has been strengthening today versus the Dollar and it has formed a very good resistance around the 1.6840 zone where we can also find the 55 period Exponential Moving Average on the 4 hour chart. On the same chart we can also see a good support at the 1.6800 level, where we can find the 200 period Exponential Moving Average. The 1.6800 zone was a good resistance area in the past and now that it has been broken to the upside it should act as a good support level.

We should keep in mind that the lows of the last few candles have been higher than the previous ones, forming what we call, an Ascending Triangle. An Ascending Triangle has a higher probability of breaking to the upside, due to the fact that the price keeps hammering on the same resistance zone until it breaks it. However, the breakout can occur in any direction; therefore, the best thing to do is to wait for confirmation of the breakout before attempting an entry.

If there is a breakout to the upside, then the price may reach the 1.6900 where it may find another good resistance.

Will the EUR/JPY break below the 139.00 level?

The Euro has been losing ground for today and at the start of the European session it dropped below the round number and psychological level of the 139.00 versus the Yen. However, the downward momentum lost its steam after falling for approximately 30 pips below that level and now it has risen above the 139.00 again. If by the end of today’s session we get a close above the 139.00 level, then we may see a retracement to the 140.00 level. None the less, we know that the price may try to continue going lower and visit the 200 Day Exponential Moving Average around the 138.50 level as shown on the chart below. From the 138.50 zone we may see a bounce to the upside with a higher probability of a bigger jump. We will keep monitoring the movements on this pair to see where it goes from here.

The EUR/USD closes above the 1.3700 level.

The Euro dropped like a rock at the beginning of the European session due to the disappointing GDP readings out of the Euro Zone, but the price bounces to the upside after touching the 200 period exponential moving average on the daily chart as shown on the image below.

We can clearly see that the daily candle has left a long lower shadow and the price has closed above the 1.3700 level. We were expecting the 1.3700 to act as a resistance, but up to now the price has stayed just above that level. The long lower shadow on the daily candle is telling us that the bulls came strong into the market and bid the price up. The real body of the candle is relatively small and this is an indication of indecision, but at the same time is showing us weakness of the bearish trend. Therefore, if tomorrow we get a bullish daily candle, then we may see a change in direction to the upside for next week.

The EUR/JPY breaks the 140.00 level and keeps falling.

The Euro is still being affected by the weak European fundamentals and the fact that the Bundesbank, the German central bank, has mentioned that it will support the European Central Bank if they decide to lower their interest rates even lower. This has caused steep declines on the Euro versus the Dollar, but also versus the Yen.

On the 4 hour chart below we see that the EUR/JPY has kept its bearish momentum since it started falling from the 141.00 level. Even though we see that once the price reached the 140.00 during the first visit, it then pulled back to the 141.00, just to fall right back down to the 140.00. After a brief consolidation just above the 140.00 level, the pair breaks this zone to the downside and it stalls at the 139.50 level, half way to the 139.00.

We may probably see a pullback to the 140.00, which should act as a resistance now, and a possible bounce to the downside from there. But if the price does not retrace and continues falling, then a visit to the 139.00 level can cause the pair to bounce to the upside from there.

The GBP/USD is close to touching the 1.6800 level.

After the last pullback to the 1.6900 level, the GBP/USD has been steadily dropping from that level and it is getting closer to the round number and psychological level of the 1.6800 from where it may bounce to the upside. On the 4 hour chart below we can also see that a few pips below the 1.6800 we have the 200 period exponential moving average (blue line), which can also act as a good support for the pair around this zone.

We can also see on the chart that this pair has been making some very interesting bounces from the round number levels, even though in some occasions it has broken them. However, the pair has been falling since its last visit to the 1.7000 area and it is clearly over-sold. Therefore, we may see some profit taking around the 1.6800, which will also help in the price stalling there.

The EUR/USD stays consolidated around Friday’s lows.

The dollar is holding on to its gains versus the Euro as the traders and investors await the German Zew Economic Sentiment for tomorrow. Even though some of the most prestigious international banks have lower their forecasts on the Euro, which has been affected by the recent comments from the European Central Bank, the EUR/USD pair stays very undecided for today and it stalls its fall around the 1.3850 level, just as we see it on the daily chart below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/.

On the chart we can also see that if the price keeps falling, then it could reach the 1.3700 level from where it may bounce to the upside, or if it retraces to the 1.3800 level, it can bounce to the downside from there.  Whatever the case may be, it should be wise to wait for the price to reach any on those two level first before taking a position on this pair.

Will the EUR/JPY bounce or break from the 140.00 level?

The Euro fell today versus the Yen and it reached the 140.00 level. On its first visit to that round number and psychological level, the pair gave us a bounce of more than 40 pips, but it fell right back down to the 140.00 zone. This pair usually gives us a range of 40 to 50 pips when it bounces from the first visit to an important support/resistance area.

However, we may see a breakout of the 140.00 to the downside. In case we see a breakout, then we should wait patiently for confirmation of the breakout and then the pullback for a possible short entry. Below the 140.00 level, the next important support is the 139.00 zone from where we may see the price try to stall there.

All eyes on the current pullback of the GBP/USD to the 1.6900 level.

The Pound has been very volatile versus the Dollar for today, showing strength on occasions and making us believe that it was going to continue with its uptrend, but then it came back down as the Dollar started gaining ground versus most of the other major currencies. So far the GBP/USD has fallen close to the 1.6900 level, but it is still missing it by about 20 pips.

On the 4 hour chart below we can see the price heading towards the 1.6900 level, which should act as a good support zone, due to the fact that it was a good resistance in the past. Therefore, we must be attentive to a possible visit to the 1.6900 from where the price may bounce to the upside, especially if the 55 period Exponential Moving Average (purple line) is closer to the same zone. We can clearly see on the chart below that the 55 EMA has been supporting the price really good and that is why it could help stall the drop one more time on the next visit.

The EUR/USD pulls back towards the 1.3900 level.

Since the moment the Euro stalled its rally versus the Dollar, we have been expecting a possible retracement to the 1.3900 level. A visit to this level could give us a bounce to the upside, due to the fact that this same round number area has been a good resistance zone in the past and now that the price has broken it to the upside, it should become support.

Below the 1.3900 level we can see different levels of support on the 4 hour chart below, like the 55 and the 200 period exponential moving averages. Therefore, if we see that the price breaks below the 1.3900 level, it will be very difficult to decide where to go short, because the pair may come right back up from any of those support levels.

The Norwegian Krone holds on to its gains versus the Greenback.

The US Dollar has been weakening during today´s session versus most of the mayor currencies and it kept losing ground versus the Norwegian Krone, even though it has found a good support level at the moment. As we can see on the chart below, after the USD/NOK broke the 5.9600 level to the downside, this zone became a good resistance area and the pair has not been able to move above it.

Today we see that prices fall all the way to the 5.9100 level. At the moment the price is consolidating just above the 5.9100 level, but it has not shown intentions of a correction yet. Therefore, prices may head in any direction from here. If we see a breakdown of the 5.9100 level, then we should patiently wait for the pullback for a possible short entry. If for any reason prices retrace to the upside and visit the 5.9600 level again, then we may see a bounce from the zone to the downside; especially if the 55 Exponential Moving Average is around that area.

Possible visit of the USD/CAD to the 1.0900 support level.

The US Dollar stays consolidated versus the Canadian Dollar just below the 1.1000 level. We can clearly see on the daily chart below that the 1.1000 level has been a good resistance zone along with the 55 period Exponential Moving Average. There is a good probability of a bounce to the upside if the price visits the 1.0900 level, but first it would have to break the area of the 1.0950 where it is having difficulty to go lower.

More than a 30 pip bounce on the AUD/USD from the 0.9200 level.

The better than expected Non-Farm Payrolls report out of the U.S. and the unemployment rate have caused the AUD/USD to drop to the 0.9200 level as the dollar strengthens versus the other major currencies. We have been anticipating this move for quite some time now, and today it has visited that level, bouncing from it to the upside.

So far the bounce has produced a plus 30 pip move and it is heading towards the 200 period exponential moving average on the 4 hour chart as shown on the image below, courtesy of the Forex Broker Activtrades http://www.activtrades.co.uk/. This 200 period EMA (blue line) may stop the price there, because if this zone was a good support level in the past, now that it has been broken, it should act as a resistance. A second visit to the 0.9200 level could give us another bounce to the upside, but we must be aware that the probabilities of a breakdown on a second visit rise.

The Dollar versus the Yen stalls at the 102.00 level.

The round number and psychological level of the 102.00 on the USD/JPY has proven to be a very strong support area for this pair. Even though today the dollar tried to strengthen versus the yen, the price can still come back down and try to visit the 102.00 level again. We must keep in mind that to the upside we have a couple of factors that could prevent the price from going higher at the moment, but who knows what may happen tomorrow after the Non-Farm Payrolls report.

On the 4 hour chart below, we can see how the 55 period exponential moving average has been holding the price quite well. However, in order to see a definite breakdown of the 102.00 level, we would need to get a worse than expected reading on tomorrow’s NFP and unemployment rate reports out of the US. But if the readings come out in line or better than expected, then we could see a rally on the pair that could take it above these EMAs on the 4 hour chart.