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CURRENCIES TECHNICAL ANALYSIS May.25

Euro

The negative sentiment prevails in the market. However, sellers lost steam when they reached the 1.1700 handle. The price bounced off the level and recovered up to 1.1750 where the recovery move stalled and the price pulled back. The technical readings suggest the further softening. The price continues developing well below the moving averages. MACD is in the negative ground and is moving downwards. RSI is neutral. The resistance resides at 1.1700, the support comes in at 1.1650.

If the euro declines further, the tone would favor further losses towards 1.1650, en route to 1.1600.

GBP/USD

The downward structure remained intact on Friday. The pound continues fluctuating in the downward range posting fresh lows. The sterling lost downward strength at the 1.3300 level and reversed its direction. The major bounced to 1.3400 where the buying interest weakened. Sellers regained control after that and sent prices downwards. The technical indicators hold within bearish territory. MACD is heading south right now. RSI is hovering above the oversold area. The resistance lies at 1.3400, the support comes in at 1.3300.

Prices may fall back below the 1.3200 mark if the US dollar returns to a growth.

USD/JPY

The US dollar had another negative day on Thursday. The risk aversion drove the US dollar to the 109.00 level, however, the EMA200 defended this mark and rejected the major to 109.70 where the EMA100 limited pair's recovery. MACD indicator is in negative territory. RSI is neutral while the moving averages mostly continued their vertical rise, however, the 50 and 100 EMAs started to change their direction. The resistance resides at 109.50, the support comes in at 109.00.

If sellers regain the 109.00 level, they will get a good chance to extend their gains down to 108.00. If bears fail to move lower, the US dollar may recover to 110.00.

GBP/JPY

The negative bias prevailed on Friday. Sellers led the GBP/JPY pair to the 146.00 level in the middle of the week. They have been trying to overcome this handle since Wednesday, bud have not succeeded so far. A bout of fresh selling pressure emerged on Friday. Bears attacked the level with a vigor force again and it seems that they will regain this obstacle this time. The technical indicators stand in negative territory. The moving averages are pointing downwards. MACD is declining in the red. RSI is oversold. The resistance lies at 146.00, the support is at 145.00.

The pound is about to suffer more losses. We expect sellers to move the spot towards 145.00 in the coming days.

EUR/JPY

The single currency is still in the red amid a bid tone around the yen. Sellers tried to overcome the 128.00 level in the morning and almost broke the handle when the spot unexpectedly found fresh bids at 127.80 and spiked to the 128.50 resistance. The EMA50 saved sellers again. The line stopped buyers and rejected the majors downwards. The price quickly pressured the 128.00 level again and is about to retake it now. The resistance lies at 128.00, the support is at 127.50.

If the sell-off extends as we expect then the pair should probe 127.50 or below in the coming sessions.

USD/CAD

The US dollar continued its recovery after the recent sell-off. Sellers lowered the US currency to the 1.2800 support area last week. They were trying to regain this area in the beginning of this week, but failed. Buyers started a recovery on Tuesday and managed to revert a majority of their losses. In the meantime, the spot is struggling with the 1.2900 hurdle. Buyers pressured the level in the late European session and almost broke it by now. The resistance stands at 1.3000, the support is at 1.2900.

We believe that a convincing break through the 1.2900 hurdle is likely to accelerate the up-move back towards 1.3100.

S&P500

Buyers continued struggling with 2730 which appeared to be well defended by sellers. Bulls reached the level last week, but did not regain it despite the numerous attempts. They attacked the level this morning, however, offers at the handle rejected the benchmark downwards. The resistance lies at 2730, the support exists at 2700.

The divergence between the chart and MACD points to a possible sell-off. If buyers do not regain the 2730 hurdle in the short-term, sellers could seize control and send the index towards 2700 where it could find a decent support from the 100 and 200EMAs.

DAX

DAX had a positive start to the day. The price gapped from 12850 to the 12900 level. The upward impulse continued afterwards and the benchmark was able to test the 13000 region when suddenly buyers lost momentum and DAX dropped towards 12900. The resistance lies at 13000, the support exists at 12900.

If the selling pressure persists, the DAX index may return below 12900 and move towards 12800 afterwards. The EMA100 is located in this region and may save buyers and reject the price upwards.

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