This week's look at the euro, dollar and yen crosses
GBP/USD is seeing a strong recovery on expectations of a rate rise. If we hold above 1.3210/60 we can hit the next target of 1.3260/65. We could even reach quite strong resistance at 1.3300/10. This is the main challenge for bulls today.
Bulls require a break above the two-week high of 1.3336 to remain in control, targeting 1.3390/1.3400 and 1.3415. We see good support at 1.3225/15, but long positions need stops below 1.3180.
GBP/JPY hit all its targets as far as 151.15/25 and continues higher to 151.38. Holding above 150.40/30 keeps bulls in control. A move above 151.40 targets 151.58/62, then 152.25/30, before the September high at 152.82/86.
The first support at 150.40/30 could hold the downside but long positions need stops below 150.00. A break lower, however, targets 149.70/65.
USD/CAD has broken strong resistance at 1.2720/30 and the August high at 1.2778. Holding above here targets 1.2855/60 and then 1.2880/85, perhaps as far as 1.2938/43.
A move below 1.2770 risks a slide to what should now be strong support at 1.2730/20 today.
EUR/JPY is re-testing the September 134.38/41 high and the most important resistance of the week. Holding here is a double-top sell signal in overbought conditions. A sustained break higher, however, is a buy signal.
You could try short positions with stops above 134.60. But you must be ready to buy into longs on a sustained break higher, initially targeting 135.10/15.
If we turn lower look for 134.14/10, then minor support at 133.85/80. Below this we target better support at 133.45/40 but long positions are risky. On further losses look for 133.09/05, then a buying opportunity at 132.90/80, with stops below 132.50.
NZD/USD has broken two-year trendline support at 6960/50 for a sell signal targeting 6885/80, 6860 (now hit and we bottomed exactly here as I write) and the 2017 low at 6820/16. The pair is becoming oversold so the downside may be more limited.
Long positions are too risky without a buy signal in oversold conditions. However, if we see a recovery look for 6893, 6914 and the resistance at 6937/41. Short positions need stops above 6960.
Technical Analyst & Trader
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