EUR/USD had spent a week pulling back below the EMA (20) – SMA (50) area (1.18590 – 1.18732), suggesting that prices are likely to trade lower to approach the 2-month low at 1.16610 next week. The 1.18590 – 1.18732 area now becomes the nearest resistance zone, with a close above on the daily closing basis triggering a further rise to retest the 32-month swing top of 1.20890.
The consolidation around 1.34465 – 1.35924 forming last week has been broken below during this week. However, GBP/USD rebounding from the 1.33183 – 1.33663 area (38.2% Fibonacci retracement, EMA (20)) on Thursday and Friday implied that we may see prices push higher next week. Once the 23.6% Fib of 1.34465 is pierced, the 14-month high at 1.36516 will be on the radar. Alternatively, a daily break below the 1.33183 – 1.33663 zone could pave the way for a lower dip to challenge the next resistance level defined at 1.32132 (the 50.0% Fib).
Wednesday this week witnessed USD/JPY successfully turn above the 2-month high of 112.706 but then retreat back below, indicating a further retracement to test back the EMA (20) support line. If this line is broken through, prices will likely continue to fall to reach the SMA (50). On the contrary, a close above the 112.706 – 113.242 resistance area opens the door for a climb to challenge the 6-month peak of 114.487.
USD/CAD’s rally continued to extend this week, hinting for a short-term bullish trend. On Wednesday, prices broke the EMA (20) – SMA (50) area to the upside, clearing the path for a possible advance in the near future to confront the substantial resistance zone at 1.26623 – 1.27768. Alternatively, in case the Greenback – Loonie pulls back below the beforementioned area (EMA (20), SMA (50)), the 32-month nadir at 1.20613 remains the solid support barrier.
This Thursday saw the Aussie – Greenback rebound from the 2-month low of 0.78068, signaling that the currency pair may reverse and turn higher to approach the support-turned-resistance zone between the EMA (20) and SMA (50) lines, with a turn above registering for a further augmentation to the 0.80641 – 0.81221 resistance area (July 27 peak, 31-month high). Otherwise, the nearest support level is determined at the June 30 swing top of 0.77126 given the 0.78068 groundwork struck.
NZD/USD’s bearish momentum looks stronger this week, indicating for a confrontation with the stable support obstacle at 0.71306 (the 3-month low) during next week of the Kiwi – Greenback currency pair. On the contrary, given prices trading higher, the EMA (20) – SMA (50) zone – now recast as resistance – is highly likely to be reached, followed by the 6-week peak of 0.74303.