Short Term Technical Analysis for Majors (07:00 GMT)
The risk appetite is back after Greek election’s results provided relief and the Euro extended its past four days gains against the dollar. Last Friday’s break above descending trendline off 1.2823 and close just under week’s high at 1.2667, overnight’s gap higher opening that regained levels above 1.2700 handle, keeps the near-term outlook positive. Immediate focus lies at 1.2800/23 zone, however, corrective easing on extended hourly conditions, is not ruled out. Initial support at 1.2667 has been briefly touched, with possible extension towards 1.2630, 55 day EMA / Fib 38.2% of 1.2441/1.2745 and 1.2600, where dips should be contained, to keep short-term bulls intact.
Strong rally, seen last Friday, after the pair broke above strong barrier and near-term range top at 1.5600, extended gains through 1.5715, our next target, to hit 1.5740 so far, just ahead of 200 day MA at 1.5750. Corrective action on overbought near-term conditions is expected to precede fresh strength, with strong support at 1.5640, mid-February range floor, offering good support. Break above 1.5750 to expose 1.5800 and 1.5847, 22 May high, while only loss of 1.5600 handle would weaken short-term structure.
The pair bounced of dangerous zone, as 200 day MA at 78.50 keeps the downside protected for now. Regain of 79.00 handle, previous support, sees potential for further gains, as hourly studies turned positive, however, still weak tone on 4H chart studies, sees risk of fresh weakness unless strong barrier at 79.80 is regained. Break here to open way for further gains towards 80.00/13 and 80.60. On the downside, 78.50, offers strong support, ahead of 77.65, broken bear – trendline / 01 June low.
Extends the short-term weakness off 0.9769, 01 June high, after today’s gap-lower opening, broke below last week’s low at 0.9477, with dip seen to 0.9425 so far. As negative near-term tone keeps the downside in focus, the pair approaches 0.9400, our initial target, also 50% retracement of 0.9041/0.9769 ascend, ahead of very strong support at 0.9366, 21 May low. Corrective bounce on oversold hourly conditions, stays capped by previous support at 0.9477, for now, however further rally is not ruled out, with 0.9500 zone, also 55 day EMA, seen capping. Only lift above 0.9540/50 zone would provide near-term relief.
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