Short Term Technical Analysis for Majors (07:00 GMT)
No significant action seen post FOMC, as the price remains capped under key near-term barrier at 1.2745, but downside seen more vulnerable. Loss of bullish momentum that cracked initial support at 1.2665 sees risk of break below near-term range and fresh weakness ahead, with important supports at 1.2600, where 55 day EMA lies and more significant, 1.2557, 18 June low, also near 38.2% of 1.2287/1.2745, to come in focus. Lift above 1.2745, however, will avert downside risk and open 1.2800/50 instead.
Easing from yesterday’s fresh high at 1.5776, after failure to clear 200 day MA, is so far seen as corrective, as long as trendline support at 1.5630 and near-term floor at 1.5615 stay intact. However, weakening hourly studies may be a signal that the pair is running out of steam. Break below 1.5615/00 to confirm and end of near-term 1.5600/1.5774 cycle and allow for stronger retracement of broader 1.5267/1.5771 rally. On the upside, 1.5720/40 zone now offers good resistance and break here would turn near-term focus higher.
Yesterday’s bounce off 78.80 lows, where 200 day MA again kept the downside protected, moved the near-term price action off dangerous zone and turned focus higher again. Strong rally that approached key barriers at 79.80 and 80.00 that kept the upside limited for a past couple of weeks sees risk of repeated failure. Clear break here to signal fresh recovery and confirm base at 77.65. Immediate supports at 79.40/20 zone, are expected to contain any pullback and keep immediate bulls in play.
The near-term focus remains skewed lower, despite slight recovery seen on a bounce from yesterday’s spike to 0.9423. However, some improvement, seen on hourly chart studies, keeps hopes of possible stronger recovery alive, with clear break above 0.9500 zone, also 61.8% of 0.9562/0.9423 descend, required to ease immediate downside risk. Regain of key near-term barrier at 0.9562, would provide relief and signal double bottom formation. On the downside, key supports lie at 0.9420 and 0.9400, loss of which will open way for fresh extension of broader downtrend from 0.9769, 01 June peak.
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