Home Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY – November 13
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Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY – November 13

The US Dollar remains in control but things have calmed down. What’s next? What levels should we watch?

Here is their view, courtesy of eFXdata:

EUR/USD:  Neutral (since 21 Aug 18, 1.1485): Break of 1.1200 could open up the way for a further rapid drop.

While we have held the view that there is “scope for EUR to retest the major 1.1300 support” since last Friday (09 Nov, spot at 1.1365), the manner of which it crashed below this level yesterday (12 Nov) came as a surprise. We indicated yesterday (12 Nov, spot at 1.1325) an “NY closing below this major support would suggest EUR could weaken further to the next support at 1.1220″ and this scenario is supposed to take days to evolve and not hours (EUR hit a low of 1.1213 during late NY hours). To put it in perspective, over the past 3 trading days, EUR has lost a whopping -1.81%. The last time we saw a decline of similar magnitude was back in June when the political upheavals in Italy were at its peak. From here, we are seeing strong support at 1.1200 but a clear break of this level could open up the way for a further rapid drop to 1.1130, 1.1100. On the upside, the ‘key resistance’ at 1.1410 has moved sharply lower to 1.1350.

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): Still in range but the risk of a break of 1.2800 has increased.

We highlighted yesterday (12 Nov, spot at 1.2935) last week’s “1.3176 high is deemed as a short-term top and we do not expect GBP to move above this level for the next couple of weeks”. While we were of the view that the “near-term bias is tilted to the downside”, we did not anticipate the bottom of the expected 1.2800/1.3080 consolidation range to come within sight so soon (GBP hit an overnight low of 1.2827). For now, we continue to hold the view that GBP is trading within the range mentioned above even though the risk of a break of 1.2800 has increased. Looking forward, a break of 1.2800 would suggest GBP is ready to tackle the late October low of 1.2697.

AUD/USD:  Neutral (since 13 Sep 18, spot at 0.7170): Diminished odds for further AUD strength.

The rapid deceleration in AUD from last Thursday (08 Nov) peak of 0.7303 came as surprise. The ‘key support’ for our positive view at 0.7150 appears to be vulnerable and break of this level would indicate that the 0.7303 high is a short-term top. For now, there is still a chance, albeit a rather slim one that AUD could stage another leg higher to test 0.7315. In other words, the odds for further AUD strength have diminished considerably. Looking forward, a break of 0.7150 would not alter the current neutral but would suggest AUD could consolidate and trade sideways for the next 1 to 2 weeks.

NZD/USD: Neutral (since 20 Aug 18, 0.6625): NZD has moved into a sideways-trading phase.

While the ‘key support’ for our positive view at 0.6690 is still intact (low of 0.6706), the weak daily closing in NY (0.6710) is enough to indicate that NZD has made a short-term top. That said, it is too early to expect a sustained decline and the current movement is deemed as part of a consolidation phase. In other words, NZD is expected to trade sideways from here, likely between 0.6635 and 0.6785.

USD/JPY:  Neutral (since 09 Oct 18, 113.10): Focus is at 114.54 now.

Despite overall positive indications, USD has not been able to make much headway above 114.00 (USD briefly touched 114.20 yesterday before easing off quickly). For now, we continue to see a chance for USD to visit last month’s top at 114.54 but a break of the 113.20 ‘key support’ would indicate that a short-term top is in place.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.