GBP/USD is starting to look a little heavy following Tuesday’s failed rally with the $1.6785 level now seen as initial resistance. Layers of resistance are noted in the 1.6815-81 region which should slow any further rallies for now as bearish focus firmly dominates. Bears remain focused on the 100-DMA and a break below which then targets March and April monthly lows.
USD/JPY continues to make gains following the recent close above the 100-DMA with immediate focus on the Y103.02 May monthly high. Initial support is noted at Y102.25 where the 55-DMA also comes in with bears needing a close below to ease the current bullish pressure. Overall a close back below the Y101.89 level is needed to confirm an end to bullish hopes and see bears looking for closes below the 200-DMA to add weight to the bearish case.
Tuesday’s move higher saw the EUR/JPY close above the 21-DMA which adds support to the bullish case and sees immediate focus shift to layers of resistance in the Y140.27-99 region where key moving averages are located. Overall bulls need a close above the Y140.99 May 13 high to end bearish hopes and target 2014 highs. Bears now need a close below the Y139.36 support to signal a false break higher and target last week’s low.
The move lower was short lived on Tuesday with the bounce back to the 21-DMA (Gbp0.8139) giving bulls a little hope. In saying that, bulls still need a close above Gbp0.8159 to confirm an easing in bearish pressure and hint at a test of key moving averages in the Gbp0.8218-38 region. While Gbp0.8159 caps bears will continue to target fresh 2014 lows. Daily studies have corrected back to neutral levels and are no longer an issue.