Daily Market Technicals

The brief dip on Friday traded below the 21-DMA before finding support and bouncing from the $1.3815 level. The pair has been unable to manage a close below the 21-DMA with bears looking for a close below to ease the current bullish pressure that is targeting a break higher with focus on the $1.3948-67 region. Overall, bears need to see a close below last week’s low to end bullish hopes and shift focus to the $1.3673-1.3731 region.

RES 4: $1.3967 2014 high Mar 13

RES 3: $1.3948 High Mar 17

RES 2: $1.3905 High Apr 11

RES 1: $1.3889 High May 1

LPRICE: $1.3874

SUP 1: $1.3830 21-DMA

SUP 2: $1.3815 Low May 2

SUP 3: $1.3771 Low Apr 30

SUP 4: $1.3722 50.0% Fibonacci 1.3479-1.3967

Following last week’s move to fresh 2014 and 5 year highs, GBP/USD has struggled topside and combined with very O/B daily studies that are due for a correction, is of some concern to bulls. In saying that, bears now need to see a close below Friday’s $1.6821 low to confirm a break of the short term daily channel, whereas a close below the $1.6748-93 support region is needed to end bullish hopes and initially target the longer term channel base around $1.6659

Friday’s spike was quickly reversed and followed up with a relatively bearish close that has seen the pair dip towards the Y101.86 support to start the new week. Initial resistance is now noted on the hourly time frame at Y102.36 with bulls needing a close above to ease the current bearish pressure. Bears are targeting a break of Y101.86 which then sees focus ratchet lower to the key Y100.75-101.32 support region with the 200-DMA at Y101.03.

Bears are taking comfort in the dip below key moving averages and triangle base in Asian trading but a close below the Y140.99 Apr 28 low is needed to confirm a clean break and see immediate focus shift lower to the Y139.96-140.02 region. Bulls now look for a close above the Y141.89 hourly resistance level from NY Friday afternoon to ease the current bearish pressure. Daily studies are correcting lower and add weight to the bearish case.

EUR/GBP continues to find solid support ahead of the Gbp0.8198 Apr 22 low which is of some concern to bears. Bulls continue to look for a close above the 21-DMA to confirm an easing of bearish pressure, whereas a close above the Gbp0.8257 high is needed to hint at further topside and shift immediate focus to the 55 & 100-DMA’s. While the Gbp0.8236-57 region caps, bears will hold out hope for a break lower that then targets the 2014 low.