EUR/USD Renewed Its Move To The Downside

EUR/USD renewed its move to the downside and if it reaches the limit of the pennant pattern then the pair should fall to 1.04000.

On the other hand, the first target of RSI divergence>>>  on the daily time frame has been reached at 1.07434. The pair has even climbed above it to 1.08285 forming a new high finishing the pennant pattern.

For that reason I have no doubt that the RSI divergence will reach its next targets too. That in turn means that the pair will probably attempt to test the local low at 1.0340 and after that it should renew its move to the upside.

To remind you, the next targets of the RSI divergence are at 1.10119, 1.10431, 1.11402.

The GBP Will Probably Test 1.2750 For A Fifth Time

After the sharp drop that occurred during the Asian session yesterday, the GBP/USD pair found a good support around 1.2350 – 1.2400 and climbed with 180 pips at the very beginning of the European one.

After a correction of about 90 pips today the pair found another good support at 1.2475 and continued rising, but until now it has not broken above yesterday’s high at 1.25462. The new high is only three pips higher than the last at 1.25494. Obviously the resistance at 1.2550 is quite strong and in order to continue rising the pair will need to form another correction.

Still, if we examine the daily time frame, we could suppose that the GBP will most likely move to the upside, where the next strong resistance level is at 1.2750. During the five month long range after the big GBP drop on 7th October 2016 that level was tested four times, but GBP/USD still hasn’t broken above it yet.

We are about to find out whether it will remain that way this time too.

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The USD/JPY RSI Divergence Remains Valid Despite The New Low

Although USD/JPY formed a new, lower low at 111.986, it is obvious that the zone around 112.50 – 112.00 remains a very strong support and that the bulls and bears are struggling within it.

At the moment neither can win, so the pair remains undecided and it would be difficult to say what direction it will choose.

Still, we should not forget the fact that despite the new low the RSI divergence remains valid on both the daily and H4 time frames. The last bar that closed on the latter is strongly bullish, which, together with the valid RSI divergence, should be an incentive to remain vigilant and not to overlook a possible move to the upside.

In case the bulls do take control and the pair starts rising, the possible move to the upside could be toward 115.70 – 116.00.

The target to the downside is around 110.50 – 110.00.

The Expectation for A GBP/USD Drop Became A Reality

As I expected yesterday GBP/USD could not remain above the resistance at 1.2650 and although it reached 1.27057 it then sharply moved to the downside>>>.

The RSI divergence between three highs on the H1 time frame was another signal that the move to the upside would end and that did happen.
In practice, the divergence reached its limit, which was at 1.25326, and at the moment the pair is at 1.25336.

It’s difficult to say what will follow next, since the pair is in a resistance zone visible on the daily time frame.
I think that if the move to the upside is renewed the expectation for it to reach 1.2750 remains valid.

On the other hand, the first support of a move to the downside is in the zone around 1.2430 – 1.2390.

USD/JPY Makes Another Attempt To Break Below 112.00

The USD/JPY support zone around 112.00 – 112.40 turned out to be very strong, because this is the fourth unsuccessful attempt to break below it and although every new attempt forms a new low a few pips below the last one the pair rebounds from it every time.

The last low that formed today at 112.049 was part of a movement within a trend channel that ended with a RSI divergence visible on the M15 and M30 time frames. The limit of that divergence isn’t that large – it’s at 112.545, which means that the pair has reached and surpassed it, so I wouldn’t be surprised if USD/JPY renews its attempts to break below the support zone.

These days the USD is weak compared to most other currencies, which is another reason to expect a renewal of the move to the downside.

Still, if the move to the upside continues I think the pair will rise toward 113.00 – 113.50.

GBP/USD Is Bullish For The Moment

Later today, toward the end of the American session, the decision about the US Federal Funds Rate will be announced. Of course, the news could surprise us, but from a purely technical point of view for the moment the GBP/USD pair is bullish.

On the H4 time frame the pair has reached a resistance at 1.2650 and in order to break above it, it will likely need to form a small correction.

I think that if the pair succeeds in breaking above the resistance it will continue moving to the upside toward the next resistance in the zone around 1.2750 – 1.2800. However, that zone could turn out to be harder to break above because the pair has rebounded from it once in December.

Moreover, we still need to see how the market will react to the US Federal Funds Rate announcement. We should also not forget that this pair is influenced by a number of political factors related to BREXIT, which could also cause a surprise so for now I prefer to focus on short-term analyses of it.