Weekly Forex technical forecast June 15 - 19

EUR/USD: Neutral

The most popular currency pair in the foreign exchange market went off the recent peak at 1.14222, falling to 1.1250 by the end of the past trading week. Besides the fact that the daily chart has two consecutive candles in the green, the current rate crossed the Ichimoku Conversion Line, which used to act as the nearest support curve in the recent bullish recovery of the pair. As far as the technical picture does not have any obstacles for the Euro to decline, at least till 1.1100, our analysts department expects the pair to keep the descending formation. On the other hand, EUR/USD could also enter into the consolidation phase without any clear direction, so both bulls and bears should be cautious not to get locked with a fixed loss.

Technical indicators point to a high likelihood of a bullish continuation in the mid-term perspective. The leading span of the Ichimoku cloud is positive to proceed with the growth, both lines are above the cloud. The Average Directional Index has a rising main line, which is pointing to a robust momentum, green and red lines are placed in the correct order to continue the uptrend. EUR/USD went back inside the ascending channel, breaching the support trendline from above. However, that can be considered as a correction only, while the overall trend direction is still headed upwards.


GBP/USD Bullish

The British Pound is in the upwards trend as well. The past week’s retracement was quite limited as GBP/USD had only two days in the red. The daily chart setup below shows that the pair tested the upper curve of the Bollinger Bands indicator, which acted as the nearest resistance. After that, GBP/USD dropped towards the support level, representing the middle of the trading range. As far as there is no daily close rate below the middle line, the pair remains in the positive zone with all chances to continue the long-term northwards movement.

Williams %R and Commodity Channel Index confirm previous suggestions as both oscillators did not perform the bearish crossover. Both values are above the 50% level and one more bullish spike could give the pair a lift to gain further strength. Our analysts department expects GBP/USD to grow towards the resistance range at around 1.2755/2800 in the week ahead. If the range was breached by the rate, then further upside momentum might be in place. Otherwise, Sterling could get back to a consolidation regime with an uncertain period of recovery.


NZD/JPY: Neutral

The New Zealand dollar was one of the strongest currencies in the first trading week of June, however, the pace of productivity growth slowed down amid market player’s uncertainty. There were several clear evidences for the Kiwi to keep retracing from the bottom, however, traders and investors did not take those signals as enough to keep buying Kiwi, so a rebound happened. The cross-rate NZD/JPY was also weak amid additional flows to safe-havens as Forex traders were seeking silence in terms of capital flows. Thus, the uptrend retraced.

On the other hand, Fridays’ price action underlined a reversal and traders went back to the market with fresh power to buy Kiwi on Monday. After the Asian trading session, the market is getting ready to activate more volatility in Europe and the United States as the trading volume is required to keep shaking quotes. A third downside shadow on today’s candle could be strong evidence that the bulls took the market under control. If that happened, Fx traders should keep opening long positions targeting swing goals at around 70/71 dollars per kiwi.

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