EUR/USD
The Euro ended last week in the positive territory after we saw strong support around the 1.0850 area. Looking at the technical picture for this pair, we can see that the daily trend remains below 1.1280 peak, therefore the current recovery is likely to be short-lived.
Regarding the short-term price action, the single currency showed a double zigzag corrective pattern with another extension higher in the focus that can reach as high as 1.1030/40 before the decline resume. In the meantime, a clear bullish engulfing candle emerged in the weekly chart, which reinforces the probability of a larger correction to the upside in the coming days. As of the week ahead, traders should focus on the mentioned above resistance zone, from where strong sellers may appear. In extension, a daily close above this zone, should clear the path for a re-test of the 50-61.8% retracement from 1.1280 high, located between 1.1065-1.1116. In the opposite, a daily close below 1.0900-1.0880 zone is needed to confirm that the bearish momentum renewed.
GBP/USD
Cable continue to trade sideways in the hourly chart between 1.2330 in the upside and 1.2085 support in the downside, which keeps the short-term view unclear for the time being.
Meanwhile, we will focus on 1.2113 support level in the coming days as it represents Friday low and a breakdown below it may trigger another decline towards the major support of 1.2085, while a daily close below this figure will confirm a big plunge in the British pound for the days ahead.
In the other side, a move back above 1.2200 handle will expose 1.2250/70 resistance zone while a daily close above it should confirm a temporary bottom in this pair, and at that time another rally in the direction of 1.2330 peak cannot be ruled out.
Overall, the short-term trend is neutral in this pair, consequently, we should wait for the break of one of those key technical levels to get more clues about the future possible price action.
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AUD/USD
The Australian Dollar recent rally stalled around 0.7700 psychological barrier on Wednesday, despite strong inflation data in Australia, which reinforced the odds of a potential bearish reversal recently.
However, as far as 0.7500 support is in place, the pair may continue to trade sideways in the coming days until a breakdown below this major support happens. In the near-term, momentum indicators remain in the negative territory.
Technically, a correction to the upside may find strong sellers around 0.7605-0.7616 zone as bears are likely to protect 0.7652 hourly barrier, in the opposite, only a breakout above this level should unwind the recent downside pressure.
To summarize, the trend remains neutral in the daily chart while the hourly chart still bearish.
USD/CAD
The pair traded in line with our expectations during the previous week and prices managed to extend its gains above 1.3400 handle. As of now, we may see some correction to the downside in early Asian trading, that can offer new buying opportunities for bulls.
The bullish cycle in the daily chart is not over yet, and we can see another acceleration towards 1.3450 zone as far as the pair continue to trade above 1.3310 low. In the short-term, 1.3370/50 levels turned support, and we will wait to see the market reaction once we reach this zone in the coming hours.
From a wider angle, the pair still bullish as the price action from 1.2760 support is showing that the preference remain in favor of buying the dips. USD/CAD is showing a clean higher-low structure from 1.3000 support (Post-Boc low) and over the med-term the outlook will remain positive above this psychological support.
USD/JPY
The pair turned positive in the daily chart for the first time in more than 6-month as prices succeed to break above 104.50 resistance zone. The probability for a re-test of 107.50 barrier remain high, however key technical resistance zone was reached during last week, which stands between 105.55 and 106.00, consequently a deeper correction to the downside is highly anticipated in the beginning of this week before the bullish trend resume.
As of now, we will watch 104.13-103.80 support zone carefully, as it represents the nearest support area for bulls. In the flipside, a daily close below the mentioned above support zone, is likely to extend the decline towards 103.50 followed by 103.15 support in extension.
To conclude, the pair managed to break the bearish trendline that comes from 111.60 high in the weekly chart, in addition the recent price action took the form of a consolidation triangle that confirmed the bullish reversal as prices broke higher from this pattern. Therefore, unless we see a weekly close below 102.80 support, the upside momentum will remain strong.
NZD/USD
The Kiwi showed a double bottom pattern in the hourly chart near 0.7108 support, which may lead to another wave to the upside in the beginning of this week.
In the hourly chart, the pair continue to respect the lower-high structure seen from 0.7486 peak, consequently the upside momentum is likely to remain limited in the coming hours. From a short-term perspective, 0.7185 is the next level of interest and a clear breakout above it is need to confirm a re-test of 0.7260 barrier again.
Finally, the trend remains bearish despite the potential double bottom pattern seen during last Friday. In this case, bears should look for a continuation lower as long as prices continue to trade below 0.7260 peak. In the meantime, a daily close below 0.7108 support will cancel the bullish reversal scenario and should support the negative outlook.