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CURRENCIES TECHNICAL ANALYSIS May.23

Euro

 

Buyers tried to build a recovery on Monday, but failed. The main currency just touched the region 1.1850 and bounced back. Sellers regained control afterwards and started to push the major lower. They returned the spot below 1.1800 and spent Tuesday in its region. A bout of fresh selling pressure emerged on Wednesday morning. As a result, EUR/USD sharply dropped to the 1.1700 handle where sellers lost steam. In addition, the technical indicators are pointing to the further downside. The resistance resides at 1.1750, the support comes in at 1.1700.

 

If price breaks below the 1.1700 region, then this could lead to renewed selling momentum, possibly towards 1.1600.

 

GBP/USD

 

Bulls gave up control trying to retake the level 1.3500. The EMA50 blocked their away first and rejected the pound downwards after that. The renewed selling pressure led the major to the 1.3400 support where the spot stayed for a while. The selling pressure increased on Wednesday and the sterling extended its losses. The pair is heading towards 1.3300 now. All the indicators recommend short positions. The resistance lies at 1.3400, the support comes in at 1.3300.

 

Sellers are strong and we are looking for the 1.3300 support break and then continuation of a fall with a further target at 1.3200.

 

USD/JPY

 

The US dollar suffered severe losses vs. the Japanese yen on Wednesday. The major continued to move lower in the early Asian session. However, the spot accelerated its decline soon after the night session started and dropped to the 110.50 first and then extended its decline to the 110.00. The morning bought fresh bearishness and the dollar hit the level 109.50 in the late European session. The technical indicators retreated from overbought territory and eased to the negative one. The resistance resides at 110.00, the support comes in at 109.50.

 

The US currency is testing the lower limit of the ascending channel right now. If sellers regain this barrier, the currency pair may probe 108.80 in the coming sessions.

 

GBP/JPY

 

GBP/JPY started the day around 149.00. The pair came under renewed selling pressure in the early Asian session and eased to 148.00. The pound faced further downside pressure over there and headed towards 147.00 which was reached in the early European session. European sellers preserved control and sent the market to the 146.00 handle. They failed to reach the level during the European hours and closed the European session at 146.50. The resistance lies at 147.00, the support is at 146.00.

 

We believe that the currency pair will recover in the coming sessions. The spot may pull back to the 148.00-147.50 area. Nevertheless, the overall market tone is negative and we expect further losses for the pound.

 

EUR/JPY

 

The EUR/JPY stuck in the red figures. Sellers broke through the EMA50 and EMA100 in the night and drove the euro to the level 129.50 by the morning. This barrier did not stop them and the pair continued its decline after the level break. The spot extended its sell-off to the level 128.50 during the European session. The technical indicators are in extreme oversold levels. The moving averages reserved their negative slope. MACD is deeply in red. RSI hit the oversold area. The resistance lies at 129.00, the support is at 128.50.

 

Sellers will most likely take a pause and may book some profits. If so, EUR/JPY may recover to the 129.00 hurdle.

 

NZD/USD

 

The NZD’s recovery move stalled when the major touched 0.6950 which was reinforced by the EMA100. Sellers placed numerous offers there and buyers had to retreat. The buying pressure partly eased and the spot declined to the 0.6900 handle where the EMA50 provided the New Zealand currency a decent support. The resistance stands at 0.6950, the support is at 0.6900.

 

If sellers regain the 0.6900 handle the pair may visit the 0.6850 area in the coming days.

 

S&P500

 

Buyers failed to hold onto gains above 2730. The increased selling pressure sent S&P500 below this level. The index headed lower after that and soon reached the 2700 region. The resistance lies at 2730, the support exists at 2700.

 

Despite the recent decline the trend is definitely on buyers' side. Sellers need to overcome 2700 and 2670 to regain control. Not speaking about the 100 and 200 EMAs are located between these two levels and which will definitely oppose sellers.

 

DAX

 

The market switched its tone on Wednesday. The positive sentiment turned bearish right in the morning. DAX gapped downwards towards 13100. The index extended its sell-off afterwards and was able to overcome this level. Sellers did not stop at the level and drove the benchmark to the 13000 support where the EMA50 limited their advance. The technical indicators give mixed signals. The moving averages are still moving upwards when MACD reached its centerline and is going to overcome it. RSI is heading towards the oversold area. The resistance lies at 13100, the support exists at 13000.

 

Bearish scenario requires a close below 13000. However, taking into consideration the oversold reading DAX may recover a bit and revisit the 13100 area first.

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