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EURUSD Daily Analysis

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EURUSD (1.105): The single currency was bearish yesterday closing in a bearish engulfing pattern. With prices breaking below 1.110, further downside is expected on a confirmation of price action falling below 1.10, unless we see a reversal back above 1.10. The dollar has resumed its strength and quite likely that further downside can be expected in EURUSD as a result. Watch for EURUSD to decline to 1.09 if the 1.10 support fails to hold the declines. The bearish view is seen being validated on the 4-hour chart where EURUSD is seen breaking out strongly from the bearish flat pattern, with further downside on a break below 1.10. Look for short-term retracements to 1.110 of the current 1.105 or 1.10, alternatively a bearish close 1.10.

USDJPY Daily Analysis

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USDJPY (100.87): USDJPY closed down below 102 support yesterday with prices extending lower. Next major support is at 100, which makes for a strong psychological level. The daily Stochastics is still forming a bullish divergence and as noted in yesterday’s commentary the potential bullish divergence could see price post a correction in the near term. On the 4-hour chart, USDJPY is still making a higher low compared to the June 23 lows of 99.01. To the upside, 102 remains a key resistance level with further upside likely only on a break above this level.

GBPUSD Daily Analysis

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GBPUSD (1.288): GBPUSD broke out of its range to the downside at 1.320 and promptly extended its decline below 1.30 with prices seen testing the lows of 1.28 earlier today. On the 4-hour chart, the downside breakout has validated the bear flag pattern confirming further downside. However, watch the bullish divergence on the Stochastics, which could offer a modest bounce back to 1.3121 – 1.320 which previously acted as support. A retest of resistance here will confirm more downside in GBPUSD.

Gold Daily Analysis

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XAUUSD (1367.67): Gold prices broke out to the upside above 1350 yesterday with early price action this morning seeing a test of 1371. There is a strong median line resistance at the current levels which could keep gold consolidated in the near term. On the 4-hour chart, 1371.91 target is likely to be achieved, but a close above this level would confirm the view. So far we only had a brief test to this level. Overall, gold looks to have completed its bullish extension following the bullish pennant breakout and a resulting retest back to 1310. We also notice a potential broadening funnel pattern forming which could see a downside back to 1327.50 following a bearish reversal near 1371 – 1375 region.