Daily Analysis of Major Pairs for May 9, 2016
EUR/USD: This pair moved upwards on Monday and Tuesday, tested the resistance line at 1.1600, and then started a bearish movement. From the resistance line at 1.1600, the price dipped by 200 pips, to close at 1.1403 on Friday (May 6, 2016). The bears would target the support lines at 1.1350 and 1.1300 this week, because some weakness is expected in the EUR.
USD/CHF: The USD/CHF went down on Monday and Tuesday, dipping into the support level at 0.9450. From that support level, further downward movement was rejected as the price started a smooth rally, which took it above the support level at 0.9700. This has resulted in a bullish signal: the price is expected to rally further this week. The outlook on the USD is now bright.
GBP/USD: After testing the distribution territory at 1.4750, the GBP/USD dropped by 320 pips, closing below the distribution territory at 1.4450. This kind of southward reversal has already resulted in a bearish outlook on the market. The GBP should be seen strengthening versus some currencies, though it might be facing some difficulties regarding a rally against the USD, because the USD would be strong this week.
USD/JPY: The USD/JPY only moved sideways last week, in the context of a downtrend. The bearish bias on the market is still valid, and further downward movement is possible. The only exception is that a possible rally in the USD might make it somewhat challenging for the bears to push the price further downwards this week.
EUR/JPY: This currency trading instrument also consolidated throughout last week, with very short-term upward and downward swings in the market. The bears are still willing to push the price lower since the outlook on JPY pairs is bearish right now. It is possible that the price would test the demand zones at 121.50, 121.00, and 120.50 this week.