Technical Update – USDCHF, GBPUSD, EURUSD, EURGBP and EURAUD

On Tuesday, the US Dollar gained against most major currencies as US consumer prices (CPI) registered a higher-than-expected month-on-month rise of 0.4% in May, lifting the annual inflation rate to 2.1%. EUR on the other hand lost some weight against GBP and AUD. 

Investors now await for the FOMC’s latest monetary policy decision, scheduled to be announced later on Wednesday, in order to determine the near-term fate of the US Dollar. ALSO READ: Important events lined-up for the upcoming week

Given the backdrop, here is a technical update on USDCHF, GBPUSD, EURUSD, EURGBP and EURAUD.

USDCHF

A move above 200-day SMA and a break above a short-term descending channel on daily chart suggested a short-term trend reversal. Also on 4-hour chart, the pair seems to form an ascending triangle chart pattern, indicating continuation of the bullish momentum. However, the pair has repeatedly rejected the 0.9000 psychological mark, also coinciding with the horizontal line of the ascending triangle, indicating that the actual trend-reversal would only be confirmed once the pair decisively conquers and closes above the 0.9000 mark. A decisive move above 0.9000 is more likely to trigger an accelerated move initially to 0.9100 and then to 0.9140 resistance area. On the downside, the pair seems more likely to hold the break-out point, resistance turned support near 0.8950-40 area, which if broken could lead the pair to test 0.8900 mark.

GBPUSD

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Prospects of an earlier than expected rate-hike by BoE continued supporting the pair, which rose to the highest level since Aug. 2009 on Monday. The pair however, seems to be topping near 1.7000 mark but has managed to hold 23.6% Fib. retracement level of its up-move from sub-1.6700 level to nearly a 5-year high touched on Monday. A drop below 1.6940 level now has the potential to drag the pair towards testing 1.6900 area. Medium-term prospects for the pair continue to remain bullish and hence, a drop back to 1.6900 could be seen as a possible buying opportunity by the traders.

EURUSD

As could be seen on 4-hourly chart, the pair continued with its rebound from near-term oversold conditions and from the lower trend-line support of a descending channel formation. The pull-back however, halted near 1.3580-85 horizontal resistance area, breaking which the pair could extend the up-move maximum towards the upper trend-line resistance near 1.3630 level. Further, taking into consideration the prevailing medium-term down-trend, the pair seems resume the depreciating move initially towards ECB decision swing lows of 1.3500 and further towards 1.3480 important support area.

EURGBP

The pair continues to trade in a well-established downtrend and even a minor pull-back, from oversold conditions (RSI below 30) on daily chart and an important support near 0.7960 marked by the lower trend-line of a descending channel formation, failed to materialize on Tuesday. A break below this important support would now open up room for further downward pressure for the pair towards 0.7800-0.7790 support area. However, considering the near-term oversold conditions and important support area, there could be a possibility of a minor pull-back initially towards 0.8000, which could possibly get extended maximum till 0.8040-0.8050.

EURAUD

The pair seems to have found good support near 1.4350-60 area, also coinciding with Nov. 2013 lows. However, continuation of the pull-back seems to materialize only if the pair manages to decisively strengthen above 1.4500-20 immediate resistance. The pull-back beyond 1.4500-20 resistance zone might get extended till 1.4730-40 resistance zone, comprising of 50-day SMA and 61.8% Fib. retracement level with intermediate horizontal resistance near 1.4610-20 area. However, a drop back below 1.4440 would confirm a reversal from important resistance level and the pair could immediate drop to 1.4400 mark. Furthermore, a drop back below 1.4400 would increase the vulnerability of the pair. The pair then might resume its weakening trend and drop towards 141.70-50 support area.