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CURRENCIES TECHNICAL ANALYSIS May.29

Euro

The euro extended its sell-off on Tuesday. Sellers stopped buyers’ correction in the morning and turned the pair around. They sent the rate to the level 1.1600 first which was broken immediately after that. Sellers continued pushing the spot lower afterwards and reached the 1.1550 support where they finally stopped. The indicators slightly changed from yesterday and continued giving sell signal. The resistance resides at 1.1600, the support comes in at 1.1550.

If sellers overcome the 1.1550 support, they will advance down to 1.1500 in the coming sessions.

GBP/USD

The tone is still negative in the market. Yesterday buyers reversed a minor portion of their losses and returned the pound to the 1.3350 hurdle where sellers regained control and sent the major to the 1.3300. The spot spent the day trying to overcome this obstacle, but managed to retake it only today. The morning brought fresh bearishness and the pound sharply dropped to the 1.3200 support. The indicators recommend short positions and staying in the negative territory. The resistance lies at 1.3300, the support comes in at 1.3200.

The 1.3200 level seemed to be well defended by buyers. Hence, it remains to be seen if sellers are able to maintain their dominant position and regain this handle. If so, they will be able extend their gains towards 1.3100 or even lower to the round 1.3000 level.

USD/JPY

The downward impetus increased in the early European session and sent the US dollar downwards through the 109.00 handle. This level was reinforced by the EMA200 which appeared to be buyers' last defense line, and to say the truth the most effective one. The bids around the level supported the US currency more than a week, however, buyers exhausted protecting this area and gave up today. Sellers vigorously attacked the 109.00 handle and finally regained it. They led the spot to the 108.50 region afterwards where they took a pause. The resistance resides at 109.00, the support comes in at 108.50.

We assume that USD/JPY will remain under pressure in the near-term. After breaking through 108.50, sellers will aim at 108.00.

GBP/JPY

The pound continued to lose value on Tuesday. A fresh wave of the sterling selling interest emerged in the morning. The major broke 145.00 and softened to the 144.00 barrier. Sellers were strong enough and regained this level. They extended the sell-off to the mark 143.20 where the downward pressure eased and the spot recovered to the recently broken 144.00. The technical indicators remained in extreme oversold levels and continued giving bearish signal. The resistance lies at 145.00, the support is at 144.00.

The GBP/JPY looks vulnerable and is poised for a test of 143.00 handle.

EUR/JPY

The EUR/JPY pair is firmly in red. Sellers tightened their grip in the early Asian session. They started to push the euro lower and reached 126.50 by the morning. The spot accelerated its decline after that and dropped to the 125.00 support where the pair faced buying rejection and pulled back. The price continued its recovery in the early US session and was able to reach the 126.00 area. The indicators remained increasingly bearish and give us a strong sell signal. The resistance lies at 126.00, the support is at 125.50.

The euro may recover to the 126.50 area or even to the 127.00 one. Anyway, the overall picture is bearish and we do not believe the spot may regain a lot. We will wait the current recovery is over to sell the pair to 125.50 again.

NZD/USD

NZD/USD remained rangebound trading between 0.6950 and 0.6900. These two levels coincide with the EMA100 and the EMA50 correspondently. As we see, the spot is unable to move higher despite all buyers’ attempts. That fact points to strong sellers who will tend to return the spot to the current lows. The resistance stands at 0.6950, the support is at 0.6900.

We believe buyers will keep trying to regain 0.6950, however, we do not believe they will succeed. The most likely scenario involves a pull back towards 0.6850.

S&P500

Sellers regained control on Tuesday. As we can see, buyers gave up control after numerous attempts to reclaim the 2730 area. They failed to stay around this region despite the EMA50 and EMA100 support. The sellers number overwhelmed the buyers one and S&P500 move lower. Bears moved the price below the EMA50 first and then retook the EMA100. The downward trajectory continued to the 2700 area which is guarded by the EMA200. The EMA50 is turning down while the 100 and 200 EMAs are still growing. MACD and RSI entered the negative territory. The resistance lies at 2730, the support exists at 2700.

To resume the uptrend, S&P500 need to rise above the 2720 area. However, the current sell-off put on hold buyers’ plans. If sellers move the benchmark below 2700 we will sell it towards 2670.

DAX

DAX had another negative day on Tuesday. Sellers finally broke through the level 12800 in the morning and dragged the index towards 12600 where they lost steam. The EMA50 is turning down while the 100 and 200 EMAs are still growing. MACD continued moving downwards while RSI reached the oversold area. The resistance lies at 12700, the support exists at 12600.

The upward trend line is almost broken. The immediate support will be probably defended by buyers and sellers will need to try hard to overcome this area. We assume that sellers will keep trying to reclaim the 12600 handle and who knows, maybe they will be lucky enough to do that.

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