Daily Forex Market Preview, 07/07/2016
The US dollar gave back most of its gains yesterday, but price action is likely to be supported to the upside in the near term. While the euro remains caught within 1.115 levels, the bias is increasingly turning bearish. For the USDJPY, early price action is showing signs of a turn around, with 102 coming in, as the initial level to be challenged, whereby a close above 102 could see the dollar extend gains to 105.
EURUSD Daily Analysis
EURUSD (1.110): EURUSD closed on a bullish note yesterday with prices stalling just close to 1.110 resistance level as noted the day before. A bearish follow through from here could signal further downside, with 1.10 coming into question. On the 4-hour chart, the recent retracement seen marks a retest of the breakout from the bearish flag pattern indicating further weakness. While 1.10 remains the initial support level of interest, a breakdown below could extend the declines to 1.09. To the upside, should there be a bullish close above 1.11; further gains could be seen, towards 1.120 and 1.124 invalidating the bearish flag pattern.
USDJPY Daily Analysis
USDJPY (101.01): USDJPY extended its declines down to 100.20 yesterday falling short of the 100.00Yen psychological level. Price action is likely to remain range bound within 102 and 100. A lower close at or below 100 could potentially keep the bullish divergence in play signaling a correction in the near term. Any upside gains are likely to come only on a close above the 102 level following which further upside could be extended to 105.
GBPUSD Daily Analysis
GBPUSD (1.297): GBPUSD closed below 1.30 yesterday after a brief touch of support near 1.28 level. Price action is likely to move into a sideways pattern for the moment with 1.30 acting as the initial minor resistance. Any gains are likely to be capped near 1.312 - 1.320 region where resistance could be established before GBPUSD falls lower. To the upside, a breakout above the resistance could signal GBPUSD moving back into the previous range that was established.
Gold Daily Analysis
XAUUSD (1367.82): Gold prices posted new highs yesterday at 1375.29 before pulling back modestly. As noted yesterday, price action could turn flat the current levels of 1375 - 1371 while the broadening wedge/funnel pattern could see a near-term pullback. 1350 followed by 1327.50 remain the key levels of support to the downside, with further declines likely to extend down to 1300. The longer-term view remains biased to the upside, and could only change on a convincing close below 1300.