Major Forex Pairs and Gold - Market Outlook 16.05.2014

EUR/USD

The euro dipped further and tested levels below important 1.3670 support, with the broken bull-trendline off the 1.3665 previous high containing dips at 1.3647. There was a quick recovery to the1.37 zone, where gains are so far capped by the daily cloud base. This may signal hesitation for a clear break lower which is required to confirm a double-top pattern formation and trigger further weakness. Hourly studies are positive; however, the overall picture remains bearish and unless the price regains 1.3770/80, the lower platform / Fibonacci 38.2% of 1.3992/1.3647 a descent and 1.3800 round figure barrier downside risk would remain in play. A loss of the 1.3647 temporary handle to open at 1.3623, with the 200 SMA and psychological 1.36 level providing support initially, with 1.3519, a 38.2% retracement of the larger 1.2754/1.3992 up leg, seen in the extension. Conversely, a rally above the 1.38 barrier would delay bears.

Res: 1.3731; 1.3779; 1.3800; 1.3820
Sup: 1.3700; 1.3688; 1.3647; 1.3619




EUR/JPY


The pair continues to move lower after breaking below the important 140 base. Bears remain firmly in control and are expected to drive the third wave which started at the 140.89 lower top towards its 100% Fibonacci expansion at 138.42; with psychological support at 138, also a Fibonacci 76.4% retracement of the 136.21/143.78 rally, seen in the extension. Oversold 4-hour studies may delay the descent in favor of a corrective rally, with the 140 barrier seen as an ideal cap. Only a rally above the 140.93 lower top and the strong 141 resistance would neutralize bears.

Res: 139.44; 139.73; 140.00; 140.26
Sup: 138.96; 138.42; 138.00; 137.47




GBP/USD

Cable maintains its bearish tone and continues to move lower, with the loss of the 1.68 handle resulting in a test of 1.6730, a 50% retracement of the1.6464/1.6995 up leg so far. Consolidative action, capped under the 1.68 barrier for now, is expected to precede a fresh leg lower, as bears are looking for a test of the 1.67 handle and Fibonacci 61.8% retracement level at 1.6667, seen in the extension. Corrective rallies above 1.68 will not be harmful for near-term bears while the lower top at 1.6870 zone stays intact.

Res: 1.6800; 1.6829; 1.6873;1.6900
Sup: 1.6782; 1.6752; 1.6730; 1.6700



USD/JPY

The pair lost traction and fell below the 102 handle, with fthe resh extension lower testing strong supports and a short-term base at the 101.40/20 zone. As the structure turned negative, immediate risk is shifted towards the downside, with a clear break below the 101.20 base, required to confirm. An immediate target lies at the 101 support and, more significantly, at 100.74, the 04 Feb low; loss of which would signal a bearish resumption of the larger down move from the 105.43, 02 Jan annual high. Further consolidation above 101.20 would signal a prolonged sideways movements, while only a break above the 103 barrier would revive bulls.

Res: 101.63; 101.71; 102.00; 102.11
Sup: 101.30; 101.20; 101.00; 100.74



AUD/USD

The pair continues to trade in near-term consolidative mode below the fresh high at 0.9407, with downside being so far protected at the 0.9320 zone - a Fibonacci 38.2% retracement of the 0.9201/0.9407 upleg. Further weakness is not ruled out as hourly studies are bearish and 4-hour technicals are turning negative; however, any move lower should stay above thepsychological / 50% retracement support at 0.9300, to keep the bulls in play. A fresh leg higher needs to clear the 0.9400 barrier for an eventual push towards the key 0.9460 peak and near-term target. Conversely, a loss of the 0.93 handle would sideline bulls.

Res: 0.9361; 0.9407; 0.9460; 0.9500
Sup: 0.9330; 0.9300; 0.9280; 0.9350



AUD/NZD

The pair’s near-term price action is onthe back foot, as a corrective pullback from the fresh 1.0874 peak extended below 1.08 which was psychological support and dipped to 1.0791 near Fibonacci 38.2% retracement of the 1.0644/ 1.0874 up leg, where the price found temporary support. Immediate bulls may be delayed, as near-term studies are negative/neutral, with increased downside risk seen on a break below 1.0786 - the Fibonacci 38.2% of 1.0644/1.0874 ascend and 100SMA at 1.0750. Reversal above the latter would keep hopes of a fresh attempt at the key 1.09 barrier and break above short-term congestion in play. Otherwise, further range trading would be the likely scenario on confirmed recovery rejection. Fresh gains through 1.0874 would neutralize the negative tone and re-open the 1.0907 breakpoint for testing.

Res: 1.0833; 1.0842; 1.0874; 1.0907
Sup: 1.0791; 1.0750; 1.0730; 1.0700




XAU/USD

Spot gold came under pressure again, after the recovery rally failed to regain the important 1315 barrier. Gains stalled at 1309 and fresh weakness appeared with a close below the 1300 support,. Weak hourly studies and 4-hour indicators at the midlines increased the downside risk, as a fresh fall cracked the next support at the 1290 zone. A fall below the latter is required to confirm a bearish resumption and open the next targets at 1273 and 1262. Only regaining levels above 1300 and a break above the 1309 top would improve the structure and shift the focus higher again.

Res: 1300; 1309; 1315; 1320
Sup: 1290; 1284; 1277; 1273