Daily Market Outlook: August 26, 2014

EUR/USD

The euro holds overall negative tone and posted marginally lower low at 1.3177, levels last time seen one year ago, with near-term price action trading in consolidative mode, around 1.32 level. Oversold 4-hour and daily studies suggest more significant corrective action in the near-term, as hourly indicators are heading north. The pair attempts to fill Monday’s gap, the first step which will signal recovery under way, ahead of previous low at 1.3240 and 1.3266, Fibonacci 38.2% of 1.3410/1.3177 descend, break of which to open key near-term barrier and breakpoint at 1.3295, lower top of 22 Aug and psychological 1.33 resistance, reinforced by daily Tenkan-sen line. Break here is required to confirm near-term base and put bears on hold for stronger recovery. Otherwise, lower top formation and fresh weakness would keep larger bears intact for extension towards next targets at 1.3103, Sep 2013 higher low and 1.3022, Fibonacci 138.2% expansion of the wave from 1.3699.

Res: 1.3220; 1.3240; 1.3266; 1.3300
Sup: 1.3177; 1.3150; 1.3103; 1.3050




EUR/JPY

The pair came under increased pressure and extended pullback off fresh high at 137.98, to test psychological 137 support, the upper border of pivotal 137.00/136.80 support zone. Weakened near-term structure and break below bull-trendline drawn off 135.71 at 137.30, sees increased risk of further retracement of 135.71/137.98 upleg, with extension below 136.80 higher base and rally’s mid-point, required to confirm scenario. Reversal signaled by daily bearish engulfing pattern, requires confirmation on a break and close below 136.80, to complete Three Black Crows reversal pattern. Alternatively, formation of higher low above 136.80, would keep alive attempts at 138 resistance zone, break of which to resume recovery action off 135.71 low.

Res: 137.30; 137.65; 138.01; 138.25
Sup: 137.00; 136.80; 136.57; 136.35




GBP/USD

Cable attempts to stabilize after bounce from fresh low at 1.6534 returned to near-term congestion tops and strong resistance at 1.66 zone. Slight improvement of hourly studies keeps fresh attempts higher in play, as 4-hour indicators are heading off oversold zone. However, more significant recovery requires break above 200SMA at 1.6680 and 18 Aug lower top at 1.6736, to offset larger bears. Otherwise, preferred scenario would be lower top formation and fresh weakness towards targets at 1.6500, round figure support and 1.6464, 24 Mar low.

Res: 1.6600; 1.6622; 1.6651; 1.6677
Sup: 1.6564; 1.6534; 1.6500; 1.6464




USD/JPY

The pair maintains overall bullish tone, as fresh bulls cracked key 104.11, 04 Apr peak, the last obstacle on the way to 105.43, 02 Jan peak. Corrective action is under way, with pullback probing below initial 104 support, ahead of fresh attempt higher. Extended pullback to face supports art 103.50, 22 Aug low and 103.20, Fibonacci 38.2% of 101.49/104.26 upleg.
Ideally, reversal should be contained here and should not extend below 103 zone, previous peaks and Fibonacci 38.2% retracement of 101.07/104.26 upleg, to keep bulls intact.

Res: 104.10; 104.26; 104.50; 104.83
Sup: 103.50; 103.20; 103.07; 102.70



AUD/USD

The pair trades in near-term corrective mode off fresh low at 0.9237, after pullback off 0.9342 retested 0.9237 support. Near-term tone is neutral and sideways trading is expected to continue, while 0.9342 top caps. Break here to signal double-bottom formation on 4-hour chart and stronger rally, which requires break above pivotal 0.9372, 06 Aug lower top, to confirm the scenario. Conversely, slide below 0.9270 higher low to weaken immediate structure and risk return to 0.9237 low.

Res: 0.9300; 0.9327; 0.9342; 0.9372
Sup: 0.9285; 0.9270; 0.9237; 0.9200



AUD/NZD

The pair resumes larger uptrend off 1.0619, 10 July low, after fresh acceleration from 1.1055 higher base, eventually broke above psychological 1.1100 barrier and tested the next target at 1.1160, Fibonacci 61.8% retracement of 1.1576/1.0488 descend. Daily close above here to confirm break and look for 1.1200, round figure resistance and previous July/Sep 2013 lower base, ahead of 1.1319, Fibonacci 76.4% retracement. Near-term consolidation under fresh high at 1.1167 is expected to precede fresh rally. Previous barrier at 1.1100 should contain extended dips.

Res: 1.1167; 1.1200; 1.1250; 1.1319
Sup: 1.1125; 1.1100; 1.1081; 1.1055




XAU/USD

Spot Gold bounces off fresh lows at 1272, after consolidating above the latter. Extension above 200SMA at 1284, signals fresh recovery action, with close above here and regain of broken bull trendline and psychological support at 1300, required to confirm formation of near-term base. Positive hourly studies are supportive, however, weak tone persists on larger timeframes and unless sustained break above 1300 occurs, lower top formation and freh weaknes would be likely near-term scenario.

Res: 1296; 1300; 1305; 1314
Sup: 1284; 1280; 1272; 1265