Chance Of More Downsides In EURUSD

Chance Of More Downsides In EURUSD

By: Simon Furman | Where To Trade | On:13-01-2015 15:11
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Key Highlights

  • Euro might be trading in a range, but it is likely to trade lower in the near term against the US dollar and other major currencies.

  • Japan Bank lending, released by Bank of Japan increased by 2.6%, compared with the last time increase of 2.7%.

  • Japan Current Account released by the Ministry of Finance came in at ¥433.0B in November 2014, compared with the last reading of ¥833.4B whereas the market was expecting ¥133.2B.

  • Japan Trade Balance released by the Customs Office came in at ¥-636.8B in December 2014, compared with the last reading of ¥-766.6B.

  • Chinese Exports released by National Bureau Statistics of China came in at 9.9% in December 2014, compared with the last reading of 4.7% whereas the market was expecting 6.8%.

  • Chinese Trade Balance released by the General Administration of Customs of the People’s Republic of China registered a reading of $49.1B in November 2014, compared with the last reading of $54.50B whereas the market was expecting $49.85B.

  • British pound might trade higher during the London session if all goes well.

EURUSD

The Euro managed to gain traction against the US dollar, but the upside failed one more time around an important resistance area. There is a critical bearish trend line on the hourly chart, which protected gains in the near term. Moreover, there is also a hurdle around the 50% and 61.8% fib retracement level of the last leg from the 1.2066 high to 1.1749 low. The Euro buyers need a catalyst for a move higher and we need to see whether they can get one or not.

Intraday Support Level – 1.1800

Intraday Resistance Level – 1.1880

  • Overall, as long as the pair is below the highlighted trend line it might continue trading lower.

  • A break above the mentioned trend line could take the pair towards the 1.19 level.

    If the EURUSD pair moves a bit lower from the current levels, then it might head back towards the 1.1750 level. A break below the same might take the pair below the 1.1720 level moving ahead.

    GBPJPY

    The Japanese yen traded higher against a basket of currencies especially against the British pound. The GBPJPY pair traded lower and traded below the 179.50 level. There is a bearish trend line on the hourly chart, which might act as a hurdle for the pair in the near term. If the pair moves higher from the current levels, then it might continue to face resistance around the 180.00 level. The mentioned area represents a major barrier for the British pound buyers. The British pound was comparatively stable against the US dollar, but failed to hold the ground against the Japanese yen.

    Intraday Support Level – 178.80

    Intraday Resistance Level – 180.00

  • Selling rallies around the trend line look like a good option.
  • A break above the same would call for losses moving ahead.

On the downside, a break below the last low might take the pair towards the 178.60 level where buyers could take a stand in the near term.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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