In this article, we would like to present the weekly technical forecast targeting the prospects of major financial assets during the period from May 06 to May 12.
The Euro – Greenback exchange continued to record another negative affair this week. However, Friday witnessed a bounce from the Jan 9 support barrier at 1.19129. With EUR/USD’s RSI remaining in the oversold territory, a short-term rally from here is totally possible. The support-turned-resistance 1.20879 (Jan 4 high) will likely be retested given prices trading higher. Alternatively, a break below 1.19129 will pave the way for a further decline towards the next support balk at 1.17122 (Dec 12 low).
The Cable – Greenback exchange remained aggressive in its mid-term downtrend stemming from Apr 17. Prices posted a very bearish start to the week with both the 1.37129 – 1.37902 support area and the Jan 3 peak at 1.36116 pierced. However, the RSI line remaining below 30 coupled with signs of profit taking may suggest a recovery in the near future, with the 1.36116 level – now recast as resistance – likely be tested back. Otherwise, the nearest support obstacle is determined at 1.32983 (Dec 15 base) should GBP/USD trade lower instantly.
USD/JPY recorded a mixed week as all its gains made earlier have been removed in the end. Thursday’s development presented that bears have been coming into play; however, buyers still showed up in earnest, which was seen through Friday’s price action. From here, prices are likely to trade higher next week. The nearest resistance zone are defined in the vicinity of 110.456 – 110.832. Alternatively, a turn back below the Jan 26 low at 108.255 on a daily closing basis will bring the next support balk at 107.304 into focus.
The Greenback – Loonie spent another week wobbling around the threshold at 1.27981, suggesting little indication about its future development in the near-term. We remain neutral on USD/CAD. A daily penetration below 1.27981 with strong momentum opens the door for a further decrease towards the next support hurdle at 1.26143. Alternatively, a confrontation of the 13-month high at 1.31197 is entirely possible given a strong rally from 1.27981.
Exactly as we have predicted, the significant support level at 0.75000 was tested this week. Some profit taking actions have been made here. The Australian Dollar – US Dollar’s RSI line crossed back above 30, signaling that we may witness a short-term correction for the foreseeable future. The EMA 20 is likely to be reached, with a break above that targeting the next barrier at 0.76486. Alternatively, given bears continuing to dominate, the 0.74590 – 0.75000 support area could be re-challenged.
The New Zealand – Greenback exchange also headed into this week very negatively. However, bearish momentum slowed in the final three days, followed by a pullback. Combined with NZD/USD’s RSI turning back from the oversold zone, we may see prices retrace further in the near future. A climb above the Dec 15 high at 0.70248 on a daily closing basis will have the 0.70728 threshold back in play. Alternatively, a bounce from 0.70248 with increasing volume may resume the mid-term downtrend.