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CURRENCIES TECHNICAL ANALYSIS May.22

Euro

 

The euro remained in the red figures, however, the major found strength to start a correction. Fresh bids around 1.1700 provided a strong momentum which led the spot to the 1.1800 region. The moving averages still point to the south and provide us with a sell signal. MACD continued its growth in the negative territory pointing to the permanent sellers' weakness. RSI left the oversold area and is neutral now. The resistance resides at 1.1800, the support comes in at 1.1750.

 

Bulls got a chance to reverse some ground. They might to move the pair to the 1.1850 hurdle where the EMA50 will most probably reject it downwards.

 

GBP/USD

 

GBP/USD undertone remained negative on Tuesday. However, sellers lost steam at 1.3400. They failed to regain the level on Monday and stepped back after that. Buyers used this chance to reverse some ground and started to build a recovery in the night. They left the 1.3400 region in the morning and headed towards 1.3450 first. The indicators remained within negative territory. All moving averages kept heading lower. MACD is still in the negative territory, however, it paused its decline. RSI left the oversold area. The resistance lies at 1.3500, the support comes in at 1.3400.

 

The GBP/USD pair is heavily oversold and requires some correction. Buyers might move the sterling to the 1.3550-1.3500 resistance area where the 50 and 100 EMAs might limit its advance, The pound may extend its decline only if sellers ignore the oversold readings and regain the 1.3400 handle.

 

USD/JPY

 

The USD/JPY pair is still in the uptrend. However, renewed USD weakness helped the yen to regain traction the other day. Sellers lowered the spot to the 111.00 level on Monday where the price spent the whole night and the morning. Buyers made an attempt to reverse losses in the early European session, but failed. The moving averaged maintained their bullish slope in the 4 hours chart. MACD continued its decline in the positive area. RSI turned neutral. The resistance resides at 111.50, the support comes in at 111.00.

 

The growing selling pressure might put on hold buyers’ plans. The spot may ease to the 110.50 handle in the coming sessions. We do not rule out a move towards 110.00. However, bulls are strong and we doubt that they will give up control. They may allow sellers to lower the price to start buying the US dollar from the more attractive prices.

 

GBP/JPY

 

A pull back from 150.00 stalled at 149.00. Sellers were ready to regain this level, when a strong buying interest emerged and sent the rate to the 149.50 area. Besides, the EMA50 and EMA200 played an important role in rejecting the spot upwards. These two lines are located in the 149.00 area and stopped the price first before sending it upwards. The moving averages kept moving lower. MACD is giving a signal to fall. RSI is giving no signal, staying in a neutral ground. The resistance lies at 150.00, the support is at 149.00.

 

If buyers fail to stay above 149.00, the currency pair will definitely move lower. Sellers may return the spot to the 148.00 region in the coming days. If so, the pair may test the 147.50 mark by the end of the week.

 

EUR/JPY

 

The softer tone in the Japanese currency fueled further upside for the single currency on Tuesday. Sellers controlled the market in the Asian session blocking buyers' way at the level 131.00. However, the euro received an additional support from the EMA50 which pushed the price through the EMA100 above the 131.00 hurdle. Buyers headed towards 131.50 and almost reached this level, when they lost impetus. The spot eased and returned to the 131.00 area afterwards. The moving averages are giving mixed signals. The EMA50 is pointing upwards, while the EMA100 and EMA200 are still bearish. MACD is growing in the positive area. RSI is approaching the overbought readings. The resistance lies at 131.00, the support is at 130.50.

 

In the scenario where the buyers keep control the pair will advance to 131.50 in the short-term. If buyers lose, the EUR/JPY pair may return to the 130.50 area.

 

USD/CAD

 

After another unsuccessful attack at 1.2900 the USD/CAD pair moved off the level and headed lower. The EMA50 and EMA100 failed to stop sellers who were able to probe the level 1.2800. The selling pressure remained strong even when bears regained this level. Sellers pushed the price lower and were stopped by the EMA200 which lies in the 1.2770 area. The technical readings are negative. The moving averages are pointing south. MACD is in the negative area and is declining. RSI is close to the oversold area. The resistance stands at 1.2800, the support is at 1.2700.

 

If sellers regain the EMA200 then northing will stay on their way any move. In this potential scenario, the pair may probe the 1.2700 zone later this week.

 

NASDAQ

 

NASDAQ remained rangebound on Tuesday. The index stuck between 6930 and 6870 levels. A weak buying pressure emerged in the night and pushed the price to the upper end of the range. The technical indicators are giving the buying signal. The EMAs are pointing higher. MACD is in the positive area. RSI is growing upwards. The resistance lies at 6930, the support exists at 6870.

 

We assume that the NASDAQ index will retain a neutral, short-term undertone.

 

DAX

 

DAX traded mixed on Tuesday. The index started the day with a gap upwards. The price jumped to the 13150 area where the buying pressure eased and the benchmark dropped back to the 13100 support. The index found fresh bids at the level and recovered to the daily highs afterwards. The resistance lies at 13200, the support exists at 13100.

 

If buyers stay above 13100, their next stop could well be at the 13200 hurdle later this week.

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