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FXDailyDose – November 27, 2013

November 27, 2013 9:23 am GMT+0  in FX Daily Dose

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FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish For past 2 days we have been mentioning that support for USD/JPY should hold in the range of 101.10 to 101.35. The first dip had found support at 101.33 and the second at 101.15. With the support holding well inside 101.00 ranges, our outlook stays exactly what it has been for past 2 days. Though initially we stay neutral but the overall outlook stays bullish and with support in the indicated range we expect further gains towards 102.30 to 102.50. On the upside the next critical resistance is 101.74 and a break over that will support the above mentioned view. On the other hand any break below 101.10 should bring further consolidation towards 100.40/100.50 and a jump from there.

EUR/USD

bullish EUR/USD’s break over 1.3580 resistance confirms the bullish sentiments. As we had mentioned in yesterday’s update, the focus will now be for further gains towards 1.3680/1.3688 resistance. On the downside the first support will be expected in the range of 1.3518 to 1.3521 and a break below this will start making the immediate outlook slightly neutral but in such case also a strong support should hold at 1.3399. In case a break below 1.3399 takes place then the focus will turn back towards downside, first towards 1.3345 support and then possibly for a retest of 1.3294.

USD/CAD

Neutral USD/CAD lost momentum after touching 1.0583. The pair has fallen into a volatile sideways mode between 1.0514 and 1.0583. The short-term outlook is neutral but the price action is indicating that 1.0500 is now acting as psychological support. As long as this support holds, the overall outlook stays mildly bullish. However if a break of 1.0514 support takes place though a support at 1.0500 is expected but such a move will increase the possibilities of a break of this psychological support. In such case USD/CAD should target the minor support at 1.0485 first and then possibly 1.0436. A cautious approach is required for any trading position because the current price action is near a very strong resistance zone. On the upside any break over 1.0583/1.0585 resistance should target 1.0609 next. We will again quote what we have been saying for past 2 days: ” In case USD/CAD manages a break over 1.0609 then it should target 1.0640 next. We also wish to mention the historical price action which shows that the pair is in a strong resistance zone. During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013.”

CAD/JPY

Neutral CAD/JPY has gone into a sideways mode between the previous support of 95.70 and 96.52. As the support is holding well over the psychological level of 95.00, the overall outlook stays positive even though the short term outlook is neutral. While saying this we wish to mention that the current price action is near a strong resistance zone and caution is required for any long position. Even though the overall outlook is mildly bullish but resistance is expected near 96.86 and even if there is a break above 96.86, a strong resistance should come at 97.11. On the downside any decisive break below the recent 95.90 may cause further consolidation towards 95.42. However as long as the price action stays above 95.00, the overall outlook will remain on positive side.

GBP/USD

Neutral Since last week GBP/USD has been finding support well over the psychological 1.6000 level. During past 9 days the closest it has gone to that level was 1.6059. The recent two supports came at 1.6133 and 1.6138 respectively. This indicates the underlying bullish sentiments as the price action is trying to remain close to the resistance of 1.6260 and far from 1.6000. However, we are staying neutral of GBP/USD and will repeat what we had mentioned during the previous update: Only a break over 1.6260 will turn the focus for further upside first towards 1.6381 resistance and with any break of that towards the psychological resistance of 1.6500 ranges. GBP/USD is once again struggling at the resistance trend line which has been in place for past 4 years. Because of this resistance zone we stay neutral even if the sentiments are all bullish. Please do check this GBP/USD alert posted a couple of days back.

EUR/GBP

Neutral For past 2 days we had been mentioning that EUR/GBP should find resistance at 0.8385. There was an effort to break that resistance but the resistance came just 5 pips above that at 0.8390. There is not much change in our outlook and though initially we stay neutral but overall outlook is bearish till resistance holds below 0.8415. With this resistance in place a retest of 0.8300 will be expected. Overall a break below 0.8300 is required to expect further significant weakness towards 0.8225 to 0.8240 support zone or more. On the upside a break of 0.8415 may bring some consolidation towards 0.8460/0.8463 but in tat case also we will expect another fall from there.

EUR/AUD

bullish Yesterday we had indicated the possibilities of a move towards 1.4920 to 1.4960 resistance if support over 1.4645 holds. EUR/AUD moved that way and touched 1.4920. Further gains first towards 1.4960 and then possibly towards 1.5020/1.5030 should take place, however considering the psychological resistance of the approaching 1.5000 level we need to be cautious as any attempt to sustain over this level have been falling since June 2010. The first attempt had failed in June 2010 at 1.5015 and after the pair had gone into a downtrend to go as low as 1.1605. The second attempt had failed at 1.4994 and the third at 1.5031.

USD/INR

Neutral There is no change in our view about USD/INR and our outlook stays same as what we have been mentioning for past 2 days. To repeat the same: “Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level.”

Check previous entries of FxDailyDose.

You may also check the daily and weekly analysis for 8 currency pairs on the following pages:

Daily Analysis:

  1. EUR/USD daily analysis
  2. USD/JPY daily analysis
  3. GBP/USD daily analysis
  4. USD/CHF daily analysis
  5. AUD/USD daily analysis
  6. EUR/JPY daily analysis
  7. GBP/JPY daily analysis
  8. AUD/JPY daily analysis

Weekly Forex outlook

  1. EUR/USD outlook
  2. USD/JPY outlook
  3. GBP/USD outlook
  4. USD/CHF outlook
  5. AUD/USD outlook
  6. EUR/JPY outlook
  7. GBP/JPY outlook
  8. AUD/JPY outlook

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2 responses to FXDailyDose – November 27, 2013

  1. GBP/USD went as high as 1.6330 but lost some momentum. However the price is finding support at 5-day EMA and a test of 1.6380/1.6381 is still expected.

  2. GBP/USD broke the resistance of 1.6260 at last and rather strongly to touch 1.6303. The next target should be the 1.6381 resistance before any attempt is made for 1.6500 psychological ranges.

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