EURUSD Intra-Day Technical Analysis - ranging started within the bearish; waiting for direction

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Sergey Golubev, 2015.05.26 20:00

Forex technical analysis; EURUSD takes another run at support (based on forexlive article)

The 61.8% of the move up from the April low is being tested for the 4th time and has been broken.  The level came at the 1.08814.  Prior to the break, the line was test on 3 separate occasions.  Better US data (durable goods, S&P Case Schiller, new home sales, consumer confidence, Richmond Fed) has helped contribute.  The pair has a 113 pip trading range. The average is 141. So if the momentum can continue, there is room to roam.

The 5 minute intraday activity in the NY session has not been a thing of beauty to be honest. Apart from the last push lower, traders seemed more intent on buying dips. Three successful test of the support target can do that to you.  This break is a chance for the market to shake the choppy cobwebs away.  The best case scenario would be to stay around the 1.0881-84 area, but already that is not happening (the price is back above that area). The next best thing for the shorts is to put up with a correction toward the 100 bar MA (blue line at 1.0905)/trend line (at 1.0911 currently). Both are moving lower.  

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Sergey Golubev, 2015.05.26 20:04

Tech Setups For EUR/USD, USD/JPY, GBP/USD, AUD/USD - Barclays (adapted from efxnews article)

The following are the latest technical setups for EUR/USD, USD/JPY, GBP/USD, and AUD/USD as provided by the technical strategy team at Barclays Capital.

EUR/USD: Our bearish view was encouraged by the close below former range highs near 1.1055. We are looking for a move lower towards targets near 1.0850 and then the 1.0660 area. Our greater targets are towards 1.0460. 1.1055 reverts to resistance.

USD/JPY: The break above the 122.05 highs confirms our bullish view and completion of the six-month range trade. Our greater upside targets are in the 124.15 area.

GBP/USD: Last Friday’s bearish engulfing candle and the subsequent move through 1.5445 signals a squeeze lower towards our targets near 1.5335. Breaking below there would signal deeper setback towards 1.5130, the 50-dma.

AUD/USD: Last week’s bearish engulfing candle encourages our bearish view. A close below our initial downside targets near 0.7790 would signal lower towards 0.7680.

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Sergey Golubev, 2015.05.27 07:40

EURUSD: Traders Sell First And Ask Questions Later (based on actionforex article)

The strong selloff in EURUSD since the start of last week suggests that the long-term downtrend may be resuming after a sub-50% retracement in April and early May. Friday's big Bearish Engulfing Candle, along with the break back below key previous-resistance-turned-support at 1.1050, set the bearish tone heading into this week, and with rates peeking below the 61.8% Fibonacci retracement of the previous rally, more downside is possible this week. As for the secondary indicators, the MACD is about to cross below its '0' level, signaling a shift to outright bearish momentum, though the oversold Slow Stochastics hint at a pause or near-term bounce over the next few days.

Bringing all of the above together, it would not be surprising to see some near-term consolidation or a brief counter-trend rally in EURUSD this week, but as long as the pair remains below the 1.1000-50 zone and Greece's debt situation remains unresolved, traders will continue to sell first and ask questions later.

A Bearish Engulfing candle is formed when the candle breaks above the high of the previous time period before sellers step in and push rates down to close below the low of the previous time period. It indicates that the sellers have wrested control of the market from the buyers.

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Sergey Golubev, 2015.05.27 17:39

Greek headlines lead to snap back in EURUSD (based on forexlive article)

The news headlines on Greece led to a snap back move higher in the EURUSD (they can come at any time unfortunately). 

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Sergey Golubev, 2015.05.28 08:47

Goldman Sachs downside targets on EUR/USD  (based on forexlive article)

Phase I
"Following the ECB QE announcement on Jan. 22, EUR/USD settled around 1.14 for 5 weeks. On Feb. 26, higher-than-expected core CPI (for Jan.) caused EUR/$ to fall two big figures to 1.12. Subsequent days brought data that showed decent activity, ending with better-than-expected February payrolls on Mar. 6 and EUR/$ near 1.08. The start of ECB QE on Mar. 9 and associated curve flattening in the Euro zone took EUR/$ to 1.05 in the run-up to the March FOMC".

Phase II
"The March FOMC had all the makings of a Dollar-positive catalyst. In the wake of this meeting, USD appreciation ground to a halt, with EUR/$ cycling in a range from 1.05 - 1.10. An upbeat ECB press conference on Apr. 15, during which President Draghi emphasized the positive growth effects of QE, helped push EUR/$ to the top of this range by end-April".

Phase III

"The weak first quarter GDP reading for the US on Apr. 29 began the unwind of the ECB QE trade, with EUR/$ and German Bund yields rising and the DAX falling on the day. Weak retail sales for April (May 13) raised fears that the Q2 growth rebound might be slow in coming, which were exacerbated by the surprise drop in consumer confidence for May (May 15). EUR/$ broke out of its 1.05 - 1.10 range and returned to its post-ECB QE level of 1.14, with broad Dollar weakness taking over against the majors".

"As a result, we are inclined to see the recent sell-off in the ECB QE trade as a temporary squeeze, albeit a painful one. It remains our expectation that fundamentals will pull EUR/$ lower, in line with our 12-month forecast of 0.95.  We expect the market to refocus on the European "growth crisis" in coming weeks, continuing to pull EUR/$ down".