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Technical Analysis – GBP/JPY and CAD/USD

GBP/JPY, H4 20oct2017 | Econ Alerts

GBP/JPY stuck in 2-week range under key 150 level

GBP/JPY, H4 20oct2017 | Econ Alerts

GBPJPY has been trading in a range during the past two weeks and is pivoting around the 20 and 50-period moving averages which are converging around the 148.50 level. This also happens to be the 38.2% Fibonacci retracement of the recent rally from 141.34 to 152.85.

Support is expected at the 50% Fibonacci at 147.11. This level has been tested a few weeks ago and was rejected, resulting in the market consolidating just above it. To the upside, the key 150 level and 23.6% Fibonacci will provide resistance, which if broken would see another push higher to re-test the 152.85 peak before the resumption of the August to September uptrend.

A drop below the 50% Fibonacci at 147.11 would turn the focus to the downside to target 145.74. Another leg lower would open the way towards key levels at 144 and 140.

The lack of direction in trend and momentum indicators highlight the neutral feel in the near term.  Aside from the horizontal moving averages, the RSI and MACD on the 4-hour chart are flat. Clearer signals are needed to determine where the market will go from here.

 

USD/CAD maintains bearish market structure; makes corrective move to consolidate around 1.25

USD/CAD, Daily 20oct2017 | Econ Alerts

USD/CAD maintains a bearish market structure as the pair continues to trade below the 200-day moving average. Looking at the short-term, prices made a corrective move higher after bouncing from 1.2061 and are currently consolidating around the 1.25 handle.

Immediate support is being provided by the 50-day MA, currently at 1.2438. Breaking below this level would target the September 8 low at 1.2061. Another leg lower would increase downside pressure and bring a resumption of the broader downtrend, with scope to reach the next major low at 1.1919.

A move to the upside would target the next high at 1.2777 ahead of the key 1.3000 level. From here, the focus turns to the 1.3215-1.3342 area. An extension higher would see a re-test of the May 5 peak at 1.3793.

In the near term, USDCAD is expected to maintain a neutral bias at 7-week highs, pivoting around 1.2500. Trend strength is weak (RSI is neutral), leaving little room for a sustained push higher. The market structure on the daily chart supports a bearish view.

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source: XM

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