Euro Struggles To Gain Momentum, Pound Approaches Breakout

Euro Struggles To Gain Momentum, Pound Approaches Breakout

By: Simon Furman | Where To Trade | On:29-09-2014 23:57
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Key Highlights

  • Euro struggled to gain momentum above a major resistance area around the 1.2700 level.
  • US dollar looks like setting up for a short term correction, but sellers need a reason for the same.
  • Japanese yen traded sideways and consolidated losses. It would be interesting to see how the yen trades in the upcoming sessions.
  • GBPUSD pair struggling to clear the 55 simple moving average (1 hour), which is currently around the 1.6260 level.

EURUSD

As mentioned in one of the previous analyses that the Euro is trying to settle around the 1.2650 support area. However, the EURUSD pair is still lagging momentum, and it is struggling to trade higher. The pair consolidated for a brief period yesterday. There is a short-term resistance around the 1.2700-20 area, which might act as a pivot for the pair. There is a bearish trend line formed on the hourly chart, which has the potential to push the pair down again. However, if the pair manages to settle above the same, then a move towards the 100 hourly moving average is possible, which is currently around the 1.2745 level. The most important thing to note is that the mentioned moving average is sitting right above the 38.2% fib retracement level of the last leg from the 1.2860 high to 1.2660 low.

Intraday Support Level – 1.2660

Intraday Resistance Level – 1.2710

  • Overall, as long as the pair stays below the highlighted trend line it might continue to struggle.
  • A break above the trend line could take the pair higher and encourage the Euro bulls.

EURUSD Graph

There is a possibility that the pair might fail to break higher, which would open the doors for a new low below the 1.2660 level.

GBPJPY

The British pound has formed a breakout pattern against the Japanese yen, which might result in a nice move in the near term. There is a contracting triangle formed on the hourly chart, which is likely to break sooner or later. There is a bearish sign developing, as the GBPJPY pair has failed to stay above the 100 and 200 hourly moving average. So, the broken moving averages might act as a resistance in the short term and could push the pair below the triangle support area. There is one more thing, which the British pound buyers must take a note is that the hourly RSI has silently closed below the 50 level, which might help sellers in the near term. A break below the triangle support area could lead to more losses in the pair may be towards the 177.00 level.

Intraday Support Level – 177.40

Intraday Resistance Level – 177.80

  • Selling with a break and close below the 177.40 level might be a good idea.
  • 200 hourly moving average might act as a solid hurdle in the coming session for the GBPJPY pair.

GBPJPY Graph

If the pair trades higher and manages to break the 100 and 200 hourly moving average, then the next level of interest would be around the 178.00 level. The mentioned level represents the triangle resistance area.

Simon Furman

Simon Furman

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

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