Daily Analysis of Major Pairs for May 4, 2016
EUR/USD: This currency trading instrument hit the resistance line at 1.1600, and then get corrected lower. However, the Bullish Confirmation Pattern is valid in the market, providing that the price does not go below the support lines at 1.1400 and 1.1350. It is expected that the price would rise from this area today or tomorrow.
USD/CHF: This pair went down by 130 pips this week, and later bounced upwards after testing the support level at 0.9450. The upward bounce is significant, since the Williams' % Range period 20 is now sloping upwards, but the EMA 11 is still below the EMA 56. Would this be a sustained reversal or temporary rally? Today we will see the answer.
GBP/USD: After testing the distribution territory at 1.4750, the GBP/USD pair dropped down by 220 pips, now below the distribution territory at 1.4550. There cannot be any jeopardy to the bearish outlook unless the price drops further by another 200 pips this week – an act that could lead to a bearish signal.
USD/JPY: The USD/JPY pair traded higher on Tuesday, in the context of a downtrend. Unless the price goes above the supply level at 109.00 (which would require a serious rally), there cannot be an end to the current bearish bias. Right now, the rally that was seen yesterday would be an opportunity to sell short at a better price.
EUR/JPY: Yesterday, this cross bounced slightly upwards in a context of a downtrend. The upwards bounce pales into insignificance when compared to the recent bearish outlook on the market. Further bearish movement is possible, and the "sell" signal cannot be jeopardized unless the price goes upwards by 300 pips (which seems unlikely right now).