FX – GBP/USD minor uptrend remains intact
- EUR/USD – Trend bias: Sideways with risk of minor pull-back first The pair has reintegrated back into the medium-term “ascending range” configuration in place since 12 Nov 2018 low of 1.1216 after a failure bearish breakdown seen on 24 Jan 2019 (after ECB Draghi’s dovish comments during ECB monetary policy press conference). The strong rebound seen on last Fri, 25 Jan has been built on a narrative that the Fed will soon end its quantitative tightening programme. However, in the past 2 days since Mon, 28 Jan, the price action of the pair has started to show signs of a pull-back/retracement of the prior strong intraday push up seen on Fri, 25 Jan as it has formed two daily “Spinning Tops” candlestick patterns coupled with a minor bearish “Ascending Wedge” range configuration that is taking shape in the hourly chart since 28 Jan 2019 minor swing low of 1.1389. Prefer to turn neutral first between 1.1455 (upper boundary of the minor “Ascending Wedge” + former minor congestion area seen from 14/15 Jan 2019) and 1.1410 (close to lower boundary of the minor “Ascending Wedge” + 23.6% Fibonacci retracement of the current rebound form 24 Jan 2019 low to 29 Jan 2019 high). A break below 1.1410 sees a potential pull-back towards the near-term supports at 1.1390 and 1.1370/1350. On a flipside, a clearance above 1.1455 opens up scope for a further push up to target the next intermediate resistances at 1.1480 and 1.1525/1540 within the medium-term “ascending range”.
- GBP/USD - Trend bias: Push up within range configuration. The pair has slipped by 1.3% (170 pips) from its last Fri, 25 Jan high of 1.3218 to print a low of 1.3055 in today, 30 Jan early Asian session reinforced by yesterday’s U.K parliament vote that chose to sent PM May back to the negotiation table with EU leaders to get a better Brexit deal. The minor uptrend in place since 03 Jan 2019 low of 1.2437 remains intact despite yesterday’s slide. No change, maintain bullish bias with key short-term support at 1.3010/3000 (close to the minor ascending channel support from 03 Jan 2019 low + the pull-back support of the former complex descending range resistance) for a further potential push up to target the next intermediate resistance at 1.3300/3400 (20 Sep 2018 swing high + 50% Fibonacci retracement of the previous decline from 17 Apr 2018 high to 03 Jan 2019 low) within a longer-term sideways range configuration in place since Oct 2016 low of 1.1950. However, failure to hold at 1.3000 negates the bullish tone for a reintegration back into the descending range from 20 Sep 2018 high to retest the next near-term support at 1.2830 (minor swing low areas of 17/21 Jan 2019).
- USD/JPY – Trend bias: Sideways. Mix elements at this juncture as the pair has started to evolve into a minor sideways range since 23 Jan 2019. Prefer turn neutral first between 111.00 and 109.00 (the minor range support). Only a clearance above 111.00 sees another round of potential upleg to target the 111.10/40 resistance (swing high area of 26 Dec 2018 + Fibonacci expansion/retracement cluster). On the flipside, failure to hold at 109.00 sees a slide to target the near-term support at 108.40 (minor swing low area of 15/16 Jan 2019) follow by the major support of 108.00/107.80 (the major ascending trendline from 23 Jun 2016 low + 61.8% Fibonacci retracement of the recent rebound from 03 Jan 2019 swing low-exclude the spike down from the flash crash to 23 Jan 2019 high).
- AUD/USD – Trend bias: Corrective rebound in progress. The pair has started to stage a rebound close to the previous short-term downside target/support of 0.7060 (printed a low of 0.7073 on 25 Jan 2019). Right now, it is right below the minor descending trendline from 11 Jan 2019 high now acting as a resistance at 0.7200 but short-term momentum indicators remain positive at this juncture. Flip to a bullish bias in any dips above the 0.7140 key short-term support (minor swing low areas of 29/30 Jan 2019 + close to the minor ascending trendline in place since 25 Jan 2019 low) and an hourly close above 0.7200 reinforces another leg of corrective rebound to target the next intermediate resistances at 0.7240 and 0.7390 (03/04 Dec 2018 minor swing high + Fibonacci retracement/expansion cluster). However, failure to hold at 0.7140 negates the bullish tone for a slide to retest 0.7073/7060.
- NZD/USD – Trend bias: Corrective rebound in progress. Broke above the upper limit of the short-term neutrality zone at 0.6800 on last Fri, 25 Jan. Flip to a bullish bias with key short-term support at 0.6800 (the former minor swing high of 24 Jan 2019 + minor ascending trendline from 22 Jan 2019 low) for a further potential push up to target the next intermediate resistances at 0.6970 (04 Dec 2018 minor swing high + minor ascending channel resistance from 03 Jan 2019 low). However, failure to hold at 0.6800 negates the bullish tone for a slide back to retest the minor ascending channel support at 0.6755.
*Levels are obtained from City Index Advantage TraderPro platform
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.