A News Heavy Week
This approaching week holds a number of high impact economic events, with the GBP and USD focus from late last week carrying over into early in the week. Mid-week the focus will shift to the AUD, NZD and EUR with the NZD Interest Rate Decision and rate statement being a key focus for pacific pairs. Towards the end of the week GBP and USD come back into focus with several economic events impacting the currencies. Traders should keep an eye on news feeds to stay updated on the outcome of economic events.
Looking at the major currency pairs it seems as though USD bulls are attempting to control price after a significant USD bearish trend. Keep reading on to see our technical outlook for each major pair.
AUDUSD Daily Chart
Price has found resistance around the significant 0.7400 level, forming a new yearly high at 0.74135. Price has since failed to retest the high, with bears managing to push price below the 2019 high to close last week's trading. The last time price traded into this zone was in December 2018 topping out at 0.739, which initiated a large sell off into 0.67445. Could this be the start of a downturn, or is it just another correction in a bull market?
AUDUSD Hourly Chart
On the hourly chart AUDUSD is in an ascending channel, with the major pair pressing to the upside. The last daily swing low at 0.72539 and the last swing high at 0.73451 are significant intraday pivots to watch in the coming week, with a break outside of either of these potentially opening the pair to downside or upside respectively.
EURUSD Daily Chart
EURUSD has attempted a run below the daily trendline, but has failed to close a daily bar below the trendline. The major pair also made a run below the last significant low at 1.17621, but was unable to close a daily bar below the level. With the EUR showing these signs of weakness against the USD, combined with ECB concerns about the stability of EUR strength will the market have a shift in trend?
EURUSD Hourly Chart
On the hourly chart a bearish trendline has formed. A convincing push below the last daily swing low at 1.17372 could signal further downside on the major pair, and likewise a movement above the last swing high at 1.19005 could indicate continued upside.
GBPUSD Daily Chart
GBPUSD found support at a previous support/resistance level, with the recent low at 1.27622. The pair had three days of bullish movements which seem to be losing steam now. Brexit is resurfacing in news cycles, and the Mayor of London appears to be more inclined to impose a second lockdown. Both of these factors are concerns for GBP strength.
GBPUSD Hourly Chart
GBPUSD on the hourly chart is in a tight trading range between the most recent daily swing high and low. Price appears to be corrective after an impulsive leg to the downside. A break outside of this trading range could be a signal for further direction on the major currency pair.
USDCHF Daily Chart
USDCHF has found support at the significant 0.900 level, and has formed a higher high and higher low, indicating that direction may be shifting. The major Forex pair is still trading below the downtrend line, and is currently approaching the trendline again. Price closed the week with a strong bullish candle after a week of trending sideways.
USDCHF Hourly Chart
The Forex pair is currently forming a wedge pattern. A break of this pattern could indicate direction, with a break of the most recent daily swing high or low adding extra confirmation of direction.
USDJPY Daily Chart
The USDJPY has broken to the downside of a wedge pattern on the daily chart which is an indication of further downside, however the pair is currently testing the support zone of around 104.500. Previously the pair has been bought out of this area numerous times, so traders should watch to see if support is found here again. Alternatively a break below the area would be another confirmation of further downside.
USDJPY Hourly Chart
The major Forex symbol is in a clear down trend on the hourly chart, forming lower lows and lower highs. The pair is currently riding along the 21 and 50 moving averages as it presses to the downside. Just below market is the previous daily pivot at 104.185. Traders should watch to see if the level holds or breaks to establish direction on the FX pair.
USDCAD Daily Chart
USDCAD has bounced at the long term support trendline, breaking to the upside of the immediate downtrend line. The major Forex pair has been trading sideways for the previous seven days, unable to find clear direction.
USDCAD Hourly Chart
Price is in a tight trading range, with the recent daily swing high at 1.32472 and the recent daily swing low at 1.31276. Price has also formed an ascending trendline since breaking the downtrend. A break out of the current trading range could signal further direction for the major Forex symbol.