EURUSD:
The EUR continues to consolidate near the 100 day moving average. The EUR is holding above trend line support, however, analysts remain cautious as a horizontal breach of trend line support is often followed by a break lower. The currency’s inability to remain within trend line support and resistance means that buyers are backing off. The reason we are seeing consolidation at the 100 MA is because major Resistance is holding at a 1.30 handle. The EUR is now set to either break out on a close above resistance or to stumble lower as buyer exuberance has temporarily worn off.
GBPUSD:
Friday’s price action took the Pound above near term Resistance which had been holding near 1.53. However, it left the GBP just shy of the prior high at 1.5450. The GBP has managed only once to have three straight winning sessions since the rally began in mid March. If the Pound can pull off another positive session Monday, it will most likely take out the prior high and move within striking distance of the 200 day MA at 1.55. A close above the 200 MA may lay the ground work for the GBP to test the 1.60 range. However, the GBP has had no problem pulling sets of three day losing streaks (three and half times since mid May) which could put the GBP right back under Resistance at 1.53 just as quickly. For now the GBP has clawed its way back into trend line support and resistance range so Monday’s price action will be crucial in dictating the GBP’s next move.
USDCHF:
The CHF has started to consolidate as it bumps up against major resistance at 1.04. Technicians are monitoring the CHF for the formation of a right Shoulder in the infamous Head and Shoulders chart pattern. The left shoulder has formed at point A while the head has formed at point B. Traders who are bullish the CHF are actually looking for a pull back to a 1.08 handle as that may be the start of the right Shoulder. If the right Shoulder in fact materializes traders may be loading up on long CHF positions with a close below current resistance at 1.04. For now this period of consolidation is expected given the pattern and the unbelievable rally in the Franc over the last six weeks.
Written by bforex.com
