Technical Update - EURUSD, AUDUSD, USDJPY and USDCAD

September 15, 2015 13:56

EURUSD

Barring its volatile movement during the last week of August, the pair continues to trade within a broad trading range as depicted by formation of a rectangle on daily chart. However, the pair has now moved back above 200-day SMA and unless it continues holding above this important MA it is likely to make a fresh attempt to move higher towards testing the upper end of the trading range. Hence, a move above 1.1340-50 immediate horizontal resistance is likely to trigger a follow-up buying interest, lifting the pair back towards 1.1440-50 trading range resistance. Meanwhile, a sustained weakness below 1.1280 level, leading to a subsequent drop back below 200-day SMA, currently near 1.1235 level, seems to drag the pair back towards 1.1120-1.1100 important horizontal support. Further, failure to hold 1.1100 support area now seems to open room for a retest of the lower end of the trading range support near 1.0820-1.0800 area. Intermediate support is pegged near 1.0880 level.

AUDUSD

The pair's recovery from its lowest level since April 2009, also coinciding with the lower trend-line support of a well-established trend-channel on daily chart, failed to lift the pair towards an important resistance confluence near 0.7200 mark. This 0.7200 level comprises of the upper trend-line resistance of the descending channel and 23.6% Fib. retracement level of the pair's down-leg from May high to Sept. low. Hence, a clear strength above 0.7200 strong resistance, marking a channel break-out, is likely to lift the pair beyond 50-day SMA intermediate resistance, currently near 0.7255-60 area, towards its next major resistance near 0.7390-0.7400 zone, marking 38.2% Fib. retracement level. Alternatively, should the pair continue witnessing selling pressure and sustains its weakness below 0.7100 mark, it is likely to fall back towards a very important support near 0.7020-0.7000 psychological mark. This 0.7000 region now seems to act as near-term strong support for the pair, which if broken has the potential to drag the pair, possibly even below 0.6900 round figure mark support, towards retesting the lower trend-line support of the channel, currently near 0.6820-0.6800 area.

USDJYP

Failure to move back above 200-day SMA and a subsequent break below 120.00 mark now seems to force the pair back towards retesting the very important support near 119.10-119.00 mark. Further, considering that the pair has dropped below 200-day SMA for the first time since Aug. 2014 and a subsequent failed attempt to move back above the very important SMA, the pair seems more likely to break below 119.00 mark important support. Hence, a decisive break below 119.00 mark is likely to trigger extension of the near-term corrective move back towards retesting 116.20-116.00 support marking 38.2% Fib. retracement level of Feb. 2014 to June 2015 big up-move. Meanwhile on the upside, 200-day SMA, currently near 120.80-121.00 region seems to continue acting as immediate strong resistance. Only a sustained strength back above 200-day SMA resistance region might negate the near-term expectations of a corrective move and lift the pair immediately towards 121.90-122.00 horizontal resistance zone.

USDCAD

Although the pair continues to hold the lower trend-line support of a well-established ascending trend-channel formation on daily chart, it has failed to clear a short-term descending trend-line resistance near 1.3300 mark. Moreover, the near-term trading range continues to narrow clearly indicating that the pair is ready to make a big move on either side once it breaks out of the trading range. Hence, a decisive weakness below the lower trend-line support of the channel, currently near 1.3240-30 area, could immediately drag the pair towards 200-day SMA support, currently near 1.3170-65 area. Further, a break below the ascending channel would confirm continuation of the near-term corrective move for the pair towards 1.3060-50 support area, representing 23.6% Fib. retracement level of June-August up-leg. Alternatively, should the pair continue to hold the trend-channel support and manages to conquer 1.3300 mark resistance, it might immediately aim towards retesting its recent highs resistance near 1.3350 level and possibly dart towards testing the upper trend-line resistance of the channel, currently near 1.3540-1.3550 area.

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