Weekly Technical Analysis For April 23rd to 27th, 2018
EUR/USD: The EUR/USD upward movement was limited at the 1.2384 resistance level and then the pair showed a bearish action last week. The greenback gained ground against the euro after softer than expected inflation readings in the eurozone. The eurozone {{ecl–68||CPI}} Inflation rose by an annualized 1.3% in March, up from February’s 1.1%, but weaker than expectations for an increase of 1.4%.
Looking ahead, the European Central Bank will hold their meeting on Thursday. There is no rate change is expected from the ECB, however, Governor {{ecl–565||Draghi}}'s statements about inflation will be closely followed by the market. The central bank cut its monthly bond purchases from €60 billion to €30 billion back in October but extended the program until the end of September 2018. Additionally, the ECB’s {{ecl–1587||Nowotny}} comment stamped on the market in past weeks. He said they will end bond buys this year, adding that it is too early to say when rate hikes will start.
In the US, the first–quarter {{ecl–375||GDP}} will be announced on Friday. It is expected to show the annualized growth rate slowed to 2.0% from 2.9%. A lower than the expected reading would put pressure on the US dollar.
Moreover, German {{ecl–142||Unemployment Rate}} will be also closely followed by the market. The market expects the unemployment rate to be to 5.3% in April, the same as a month ago.
The EUR/USD pair closed last week below the daily resistance level of 1.2314. As long as the price sustains below that level on a daily basis, the downward movement may continue and we will see 1.2232 and 1.2171 as support levels. On the other hand, if the price goes beyond 1.2314, the next resistance level is holding at 1.2384.
Support: 1.2232 – 1.2171 – 1.2109
Resistance: 1.2314 – 1.2384 – 1.2465
GBP/USD: Sterling dropped significantly after disappointing CPI figures last week. Headline UK CPI unexpectedly eased to 2.5% in March from 2.7% previously while core CPI eased to 2.3% from 2.4% The expectations of a May rate hike have dropped with inflation falling,
In the upcoming week, the UK GDP growth for the first quarter will be published. It is expected to stand at 1.4%, as the same as the previous reading. A better-than-the-previous realization in GDP growth would be considered positive for the UK economy which is expected to get hurt by the Brexit process.
The GBP/USD pair closed last week just above the 1.3999 support level. As long as the price stays above 1.3999, on a four hourly basis, the pullback may be limited. At this point, we will face 1.4130 and 1.4277 as resistance levels. On the other hand, if the price breaks down 1.3999, the next daily support level will be at 1.3880.
Support: 1.3999 – 1.3880 – 1.3745
Resistance: 1.4130 – 1.4277 – 1.4408
USD/JPY: The dollar was higher against the safe–haven yen last week and the USD/JPY pair reached the 107.65 key resistance level.
Watch out for the BoJ Interest Rate Decision this week. The BoJ Monetary Policy Decision will be announced on Friday. No change is expected in monetary policy while painting a slightly better picture of the economy.
In order for the USD/JPY upward movement to gain more momentum, it needs to go beyond 107.65 and stays above that level on a four hourly basis. In this case, the next resistance level will be at 108.78. Otherwise, we will see again the daily support level of 106.46.
Support: 106.46 – 105.04 – 103.76
Resistance: 107.65 – 108.78 – 109.35
GOLD: The gold price found sellers from the 1352 resistance level last week. In the event that the fall continues, we will face 1330 as an important support level. However, as long as the price sustains above 1330, the downward movement may be limited and we will see resistance at the 1352 leve again. Otherwise, if the price drops below 1330, the next support level can be found at 1319.
Support : 1330 – 1319 – 1307
Resistance: 1352 – 1367