Weekly Technical Outlook - January 11th-

The Euro traded higher across the board during last week, as the single currency played as a safe haven after we saw a big sell-off in the equity market.

Technically, the pair managed to bounce near the 61.8% Fibonacci retracement of the recent recovery from 1.0520 lows, as mentioned in our previous report. In addition, a strong bullish engulfing candle has emerged, which reinforces the positive outlook in the near-term.

Actually, the bullish pivot stands at 1.0770 level, and as far as prices keep trading above this level, the upside pressure will remain intact.

Looking at the week ahead, traders should focus on 1.0990 followed by 1.1060 level in the upside, while in the downside, prices should remain steady above 1.0800 psychological support.

Support: 1.0800-1.0770-1.0710

Resistance: 1.0990-1.1010-1.1060

 

GBP/USD

The British pound continue to head lower as the downside pressure has increased.

The Sterling remain one of the weakest currencies in the FX Market and we expect this weakness to continue as the divergence between BoE and the FED monetary policy has widened very significantly.

Technically, the pair succeeded to break below 2015 low which stands around 1.4530 level, and we saw a weekly close under this level, which cleared the way for further decline towards 1.4300-1.4200 zone in the next weeks.

In the flipside, the nearest resistance level is located at 1.4640, and only a daily close above this level will warn about a potential recovery in the near-term.

Otherwise, bearish pressure is likely to remain strong.

Support: 1.4500-1.4320-1.4200

Resistance: 1.4640-1.4665-1.4695

 

USD/CAD

The pair extended its gains during last week, as the majority of market participants remain buyers on dips.

The bullish structure still intact, and since 1.3815 lows, we have seen a series of higher lows /higher highs, reinforcing the bullish outlook.

As of now, the pair is approaching a big resistance zone seen in the weekly between 1.4185-1.4310 zone, from where we expect traders to begin booking profits, which may stop the current rally in the near-term.

Momentum indicators are clearly overbought, and the upside potential is limited. Consequently, our near-term view has turned to neutral while the med-term outlook is strongly bullish.

In the hourly chart, 1.4050 level is considered as the bullish pivot and only a daily close below this level, will send the pair into a larger correction to the downside.

Support: 1.4105-1.4075-1.4050

Resistance: 1.4185-1.4200-1.4310

 

AUD/USD

The Australian Dollar fell sharply during last week and has lost more than 4% of its value against the U.S Dollar.

Regarding the near-term price action, we can see that the pair managed to break below a major support level at 0.7095, which keep the pair under pressure in the hourly chart.

Consequently, we believe that prices are heading south in the direction of 2015 lows, located near 0.6900 psychological support.

In the opposite, a daily close above 0.7075/07095 zone, will send prices higher in the next days before the sell-off resume.

Support: 0.6950-0.6930-0.6760

Resistance: 0.7075-0.7097-0.7130

 

USD/JPY

USD/JPY traded in line with our expectations and we believe that the pair is set for a big reversal to the downside in the next weeks.

Currently, the pair has dropped below 118.00 psychological level and we have seen a daily close below this level, which reinforced our bearish outlook.

Looking at the daily chart, the pair failed to overtake 123.70 resistance level and since then, prices sold-off sharply, breaking below all the major support levels.

The med-term target is seen at 115.30 level, but in the near-term, 116.20 should play as a strong support level and a short-term bounce is likely to happen from this level before bearish pressure to resume.

To summarize, as far as 119.70 peak is holding, downside risks are likely to persist. In the meantime, USD/JPY is trading near an important support zone, hence, a short-term bounce can happen this week, which is likely to be short-lived.

Support: 117.30-116.20-115.30

Resistance: 118.80-119.25-119.70

 

 

GOLD

The yellow metal rose strongly and has reached our daily target of 1110$ per ounce.

As of now, we believe that the near-term trend has turned bullish and gold should remain supported in the next days.

1110$ represent a strong resistance line and should cap the current upside move in the short-term as profit taking may reduce the bullish momentum.

Our view is positive for this week, and we expect the yellow metal to remain steady above 1089-1092 zone. In the upside, the next important resistance stands at 1120$ followed by 1135 in extension.

In the flipside, a breakdown below 1092-1089 zone, should send the yellow metal lower before bullish pressure renew.

Support: 1092-1082-1075

Resistance: 1110-1120-1135

 

NZD/USD

The New Zealand Dollar has confirmed a bearish reversal during last week as prices failed to break above 0.6900 psychological barrier.

Moreover, the pair has extended its losses below a major support level located at 0.6580 level, which opened the way for another extension lower towards 0.6430 level in the following days.

By now, the trend has turned to bearish in the hourly chart, and we expect the pair to remain under pressure as far as 0.6680 peak still intact.

Consequently, any rebound below this peak is likely to be considered as a -dead cat bounce-

To conclude, our view in negative in this pair as far as 0.6680 high remain intact. In the opposite side, only a daily close above this resistance will change our view in the near-term.

Support: 0.6515-0.6490-0.6430

Resistance: 0.6610-0.6680-0.6725