Daily Market Outlook: January 21, 2015

EUR/USD

The euro continues to move in narrow-range consolidative mode, off fresh low at 1.145, ahead of tomorrow’s ECB meeting. Near-term tone remains weak, as 1.16 barrier stays intact for now, limiting possible stronger rallies for retest of correction high of 19 Jan at 1.1637 and extension towards daily Tenkan-sen line at 1.1664 and descending daily 10SMA at 1.1690, where stronger rallies should be ideally capped. Overall negative structure keeps downside in focus and acceleration lower is expected in case of loss of overnight’s low at 1.1540, to expose psychological 1.1500 support and key 1.1458 low.

Res: 1.1586; 1.1600; 1.1637; 1.1650
Sup: 1.1540; 1.1500; 1.1458; 1.1400




EUR/JPY

The pair accelerated reversal from yesterday’s fresh high at 137.62 and retraced so far 61.8% of 134.68/137.62 recovery rally, sidelining near-term bulls and neutralizing attempts for further recovery, which were signaled by completion of three-day reversal pattern. Overall bearish tone and stall ahead of initial barrier, daily 10SMA, shift near-term focus lower, as studies of lower timeframes turned bearish. Close below 135.80, Fibonacci 61.8%, to confirm reversal and open lower levels at 135.38, Fibonacci 76.4% retracement and higher low at 135.11, for retest, with return to 134.68 low, not ruled out on further acceleration. Conversely, fresh strength and close above 137 barrier, is required to revive near-term bulls and turn focus higher again.

Res: 136.00; 136.44; 136.58; 137.00
Sup: 135.80; 135.38; 135.11; 134.68




GBP/USD

Cable continues to trade in consolidative phase, off fresh low at 1.5032, with overall negative picture, suggesting limited upside action, before fresh push lower. Stall of initial recovery attempt at 1.5267 and subsequent easing, which was so far capped by daily 10SMA, maintained weak near-term tone. Upticks are for now seen as corrective movements and downside will remain favored in near-term, while price action holds below descending daily 20SMA, currently at 1.5282. Only close above here would sideline immediate risk of testing initial target at 1.5000 and further easing, seen on a break lower.

Res: 1.5197; 1.5232; 1.5267; 1.5300
Sup: 1.5133; 1.5100; 1.5055; 1.5032




USD/JPY

Near-term structure weakens after today’s fresh weakness fully reversed yesterday’s gains, which were capped at pivotal 118.75/85 resistance zone, daily Ichimoku cloud top / Fibonacci 61.8% retracement of 120.72/115.83 downleg / daily 20SMA. As the pullback from yesterday’s high at 118.85 retraced over 50% of 115.83/118.85 rally, risk of further easing exists and is expected to increase in case of loss of 117.00/116.90, Fibonacci 61.8% retracement / higher low of 19 Jan. Weak daily studies support further weakness, with today’s close in red, expected to confirm. Only break and close above daily cloud top / 20SMA, would neutralize immediate downside risk and return focus towards the upper targets.

Res: 118.00; 118.24; 118.85; 119.30
Sup: 117.28; 116.90; 116.31; 116.05




AUD/USD


The pair remains in near-term directionless mode, entrenched within 0.8150/0.8250 range, after yesterday’s weakness was contained above pivotal daily 20SMA and today’s fresh strength erased losses. Neutral tone of near-term studies sees prolonged sideways movements, with break of either boundary, required to establish fresh direction. Daily studies are mixed, with positively aligned MACD and 20SMA underpinning, offset for now by RSI in neutrality zone and descending 55 and 100SMA’s. Lift above 0.8322, Fibonacci 38.2% retracement of 0.8794/0.8031 downleg and 0.8353, daily 55SMA, is required to bring bulls fully in play and signal stronger recovery. Conversely, loss of daily 20SMA at 0.8146, will be bearish and shift focus towards 0.8031, low of 07 Jan and psychological 0.8000 target.

Res: 0.8254; 0.8293; 0.8322; 0.8373
Sup: 0.8153; 0.8146; 0.8131; 0.8066




AUD/NZD


The pair maintains positive near-term tone and rallies through 1.07 barrier, to attack so far daily 55SMA at 1.0726 after retracing over 38.2% of 1.1301/1.0350 descend. Yesterday’s long green candle, which came after 4-day congestion, signals resumption of recovery rally from 1.0350 low and neutralizes downside risk. Firmly bullish near-term studies, with north-heading daily indicators, establishing in positive territory, support further upside. Clear break above 55SMA and 1.0431, Fibonacci 76.4% of 1.0864/1.0350 downleg, is expected to open key short-term barrier at 1.0864, 08 Dec 2014 lower top, ahead of 1.0889, 200SMA, above which to confirm reversal.

Res: 1.0730; 1.0754; 1.0800; 1.0843
Sup: 1.0670; 1.0636; 1.0600; 1.0570




XAU/USD

Spot gold resumes strong uptrend, paused by brief consolidation and probes above psychological 1300 barrier. Yesterday’s long green candle and bullish setup of daily technicals, with formation of 10/200 SMA’s golden cross, favors further advance. Sustained break above 1300 handle to open lower tops of 08 Aug / 17 July 2014 at 1322/24, with key barrier at 1344, 10 July 2014 lower top of larger descend from 1392, expected to come in near-term focus. However, overbought conditions of near-term studies suggest consolidation around 1300 level, with corrective pullbacks, signaled by hourly MACD bearish divergence, to be ideally contained above 1281, previous top of 16 Jan and hourly 55EMA.

Res: 1310; 1322; 1324; 1344
Sup: 1290; 1285; 1281; 1272