Daily Forex Market Preview, 04/11/2016
The markets were very mixed on Friday as oil prices surged, closing the day with over 5.0% gains. However, the equity markets failed to keep up with the gains as yen started to trim its losses and continued to gather steam again, sending USD/JPY to close on a modestly bearish note. EUR/USD's weekly chart shows last week's price action closing with a doji, which could see further downside if we see EUR/USD close below 1.1326.
EUR/USD Daily Analysis
EUR/USD (1.14): EUR/USD closed last week with a doji pattern following the previous weeks of gains. This could signal a short-term pause, but a weekly close below the doji's low at 1.1326 could signal a correction lower. Support comes in at 1.130 and 1.120. There is evidence that EUR/USD could see a stronger correction lower towards 1.10 if the support levels near 1.12 and 1.11 give way. On the 4-hour chart, EUR/USD has been consolidating near the lower median line and forming lower highs. A move below the short-term base at 1.136 - 1.135 will confirm the move lower for 1.13 initially, followed by 1.120.
USD/JPY Daily Analysis
USD/JPY (107.8): USD/JPY remains biased to the downside with no strong evidence of any short-term bounce or correction. Price action is, however, trading near the support level of the 108.1 - 108.0 region. A break below this level will see further declines towards 105.36 - 105 levels of support, from which we can anticipate some kind of a correction to the upside. Any rallies ahead of USD/JPY reaching the lower support at 105 levels will be capped near the resistance level of 112.4 - 111.4.
GBP/USD Daily Analysis
GBP/USD (1.41): Price action in GBP/USD is currently showing some conflicting signals. While there is a larger inverse head and shoulders pattern playing out with the right shoulder's low formed near 1.405 - 1.41, a break below this level could see GBP/USD post new lows. Resistance at 1.4425 remains key for any further upside gains to be formed above 1.420. To the downside, 1.4025 - 1.40 will be key, as a weekly close below this level could confirm a move lower.
Gold Daily Analysis
XAU/USD (1252): Gold prices closed with a doji candlestick pattern on Friday, but early Monday session has seen gold prices start off on a bullish note. A higher close on the daily session could keep gold biased to the upside. With prices trading near 1252 currently, the price action validated the bullish flag breakout, which points to a minimum price target near the $1260 region. The downside is well supported with initial support at 1250 followed by 1243 – 1237 levels of support.