Price is showing oversold conditions on the 4H and Daily chart, suggesting that a bounce could follow in the near-term. Nevertheless, the technical outlook for the currency pair is negative, and selling rallies the preferred strategy.
Expect solid resistance at 1.0720 and 1.0750 (38.2 % Fibonacci of the March rally). Support is noted at 1.0650 (61.8 % Fibonacci and last week's low). Should the pair break below 1.06 support, a test of the March low at 1.05 should follow soon.
GBP/USD had a strong bounce off the 1.24 level and the recent price action has been fairly bullish. However, the Stochastic indicator on the 4H Chart is showing negative divergence, suggesting the rally could pause in the short-term. Initial support is noted at 1.2450, but the important levels in GBP/USD are 1.2375 and 1.2340.
Strong demand can be expected in this area, and GBP bulls are likely to add to their long positions there. To the topside, 1.26 is the next major obstacle. A break above would then signal a move towards 1.27. However, techs suggest we will first a see a correction before the rally continues.
The short-term outlook for USD/JPY is mixed. The currency pair failed at 112.20 resistance and had a correction of almost 100 pips. This shows that selling interest remains high, and that the overall downtrend is still intact. Traders should watch the support area between 110.70 and 110.80. If we see a clear bounce off that, USD/JPY might have another test of 112 soon.
Should it break below, it will likely head towards 110 quickly. Given the lack of momentum at the moment, trading the range between 110 and 112.20 is the preferred strategy for now.
AUD/USD continues to consolidate in a relative tight range. The currency pair came under pressure overnight and is moving towards the 0.76 level. Solid support is noted at 0.7587. A break below would likely trigger momentum selling and push the Australian Dollar towards the 0.75 level.
Overall, the risk lies to the downside as the pair has been struggling with strong resistance above 0.77 and failed to gather momentum to the upside. Resistance is noted at 0.7680 and 0.7720/50.
USD/CHF broke above an important resistance level at 1.00, but the currency pair is running out of momentum. Short-term, expect a minor correction before the rally continues.
Good support is seen at 0.9960, and is likely to attract decent buy interest.
Gold ran out of momentum last week and failed once again at 1260 resistance. Nevertheless, it attracted strong demand at 1240 and managed to recover to 1250. The technical outlook remains bullish, with the uptrend clearly intact.
Expect strong support in the area between $1235 and $1239. To the topside, 1260/61 remains the major obstacle. Should Gold break above it, a move towards 1300 should follow quickly.