EUR/USD:
MAY CONSOLIDATE BETWEEN 1.1390 AND 1.1660
Last week, EUR/USD reached a temporary low close to 1.1390 before making a notable recovery. However, the pair is presently having difficulty retaking the 50-DMA, signifying that bearish momentum is still prevalent. This is also highlighted by the daily MACD, which has fallen below the equilibrium line.
In the near term, price movements are likely to remain within a range. If it fails to exceed 1.1660, the 61.8% retracement of the recent pullback could strengthen the ongoing downtrend. A drop below last week’s low of 1.1390 would probably lead to additional declines, with the next support level anticipated at the September 2024 peak of 1.1200.
GBP/USD:
THE FAILURE TO BREAK ABOVE THE 50-DAY MOVING AVERAGE AT 1.3500 COULD LEAD TO ADDITIONAL DECLINES.
GBP/USD faced significant resistance around 1.3790 last month, forming a Head and Shoulders pattern. The pair has fallen below the neckline of this formation, leading to a prolonged drop that has paused near the May low of 1.3130. A temporary recovery is currently taking place; however, if the pair cannot regain the 50-DMA at 1.3500, the downtrend may continue. The anticipated target of this pattern is approximately between 1.3000 and 1.2970, which could be the next goal.
USD/JPY:
SHORT-TERM SUPPORT AT 145.80
- Last week, USD/JPY attempted to break out from a multi-month base but faced significant resistance around the projection of 150.90, consequently returning to its previous trading range and highlighting a deficiency in sustained upward momentum. The recent pivot low at 145.80 acts as a short-term support level.
- Should the pair fail to hold above the 200-DMA at 149.50, a more significant decline may be anticipated. A drop below 145.80 could lead to a further decline towards the ascending trend line that has been in place since April, which is currently situated at 144.00 and 142.10.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!