US dollar and Japanese yen gained a lot recently and looks set for more gains moving ahead.
In Australia, the trade balance released by the Australian Bureau of Statistics registered a reading of -925M, compared with the last time trade deficit of -1,323M.
Australian imports increased by 1% whereas the last increase was of 2%.
Australian exports increased by 1% whereas it declined by 2% last time.
Japanese Services Purchasing Managers Index (PMI) released by Markit Economics came in at 51.7, compared with the last reading of 50.6
Chinese HSBC China Services PMI™, released by Markit Economics registered a reading of 53.4 whereas the last reading was around 53.0.
EURUSD fell lower and remain under selling pressure as the FX market sentiment favor more losses in the short term.
British pound traded lower not only against the US dollar but also against the Japanese yen.
The Euro fell sharply recently against the US dollar as selling pressure mounted on the Euro across the board. A lot of that had to do with the ECB and tensions in the Euro area about the Greece exit. The EURUSD pair cleared the 1.20 support area comfortably and fell even below the 1.1920 support area. This shows the amount of bearish pressure on the Euro buyers. There is a chance that the EURUSD pair might correct higher in the near term. However, if that happens, then the pair might find sellers around the 1.2020-40 area. There is a bearish trend line formed on the hourly chart as well, which might act as a hurdle for buyers.
Intraday Support Level – 1.1850
Intraday Resistance Level – 1.2020
Overall, as long as the pair is below the 100 MA it might continue trading lower.
A break above the mentioned MA could take the pair towards the 1.2150 level.
Moreover, the 100 and 200 hour moving averages area also aligning on the upside to act as a resistance. There is a point to note as well that the 100 hour MA is around the highlighted trend line, which escalates the significance of the trend line.
The British pound also came under pressure and traded lower. The GBPJPY was one of the worst performers. There was a bullish trend line on the hourly chart, which once breached paved the way for sharp downside in the short term. The pair traded below the 182.00 support area to set a new intraday low. There looks no hope for correction in the near term and any major correction can be seen as selling opportunity.
Intraday Support Level – 181.50
Intraday Resistance Level – 183.00
Selling rallies around the 183 level look like a good option.
A break above the same would call for gains moving ahead.
Let us see how the GBPJPY pair trades during the coming sessions. There is no denial that the pair is under bearish pressure and might continue trading lower. A break below the recent low might open the doors for a test of 181.00.
Success = few pips, thousand times
Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm
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