Following a modest retail sales print on Friday, the US Dollar was seen posting a correction and by early Asian trading, most of the USD Crosses are pulling back off their recent highs. The correction however only signals a pullback to the trends which are likely to be established provided prices manage to find support at the identified levels.
EURUSD Daily Analysis
EURUSD (1.12): EURUSD closed on a bearish note on Friday following the failure to break above 1.13 resistance. Price action is currently bearish but a daily close below Friday's low of 1.1213 is needed for further downside. Price action is biased to the downside on the breakout of the rising wedge pattern indicating a test of support back to 1.113 – 1.11 support. A break below this support could send EURUSD lower to 1.095 – 1.093 support. In the event of the support near 1.113 – 1.11 holding, EURUSD could be attempting to make another move to the upside. For the moment, with price trading below 1.1335, it seems evident that EURUSD could be looking to post declines down to 1.113 support.
USDJPY Daily Analysis
USDJPY (113.9): USDJPY managed to bounce off the 112 support with Friday's price action forming an inside bar. So far, today's price action in USDJPY has broken out to the upside. A bullish close above Thursday's high of 113.6 will signal a continuation to 117.0 – 117.25 region to establish resistance. On the 4-hour chart, the price has managed to move steadily in an uptrend. Short-term support at 112.510 is the most likely support USDJPY will test on any pullbacks in the run up to testing 117.
GBPUSD Daily Analysis
GBPUSD (1.45): GBPUSD remains range bound within 1.4635 – 1.443 levels of resistance and support. The strong consolidation seen could signal a breakout in the near term. To the upside, the scope is limited as price needs to breakout strongly above 1.4635 – 1.4743 resistance. To the downside, a break below 1.443 could see a move down to 1.435 – 1.43 support. Overall, GBPUSD is looking to post a longer term recovery/correction and a break above 1.474 would signal further upside in prices.
