The market rally was short lived on Oil prices which resumed their declines yesterday. Economic data was light yesterday and most of the markets stayed flat. Looking ahead, today's key events to look forward to include the speech by BoE Governor Carney and the US Consumer confidence numbers.
EURUSD Daily Analysis
EURUSD (1.08): EURUSD closed on a bullish piercing line candlestick pattern on the daily chart yesterday just off the 1.0837 - 1.08 support level. On the 4-hour chart time frame, EURUSD has formed a bullish inverted head and shoulders pattern with the neckline resistance coming in at 1.098 - 1.09575, while the right shoulder seems to have formed a base around 1.0809 - 1.0766. A move towards the neckline off the current right shoulder could see a continued rally to 1.113 at the very least. The Inverted head and shoulders pattern could however be invalidated on a close below the previous pivot low at 1.0723 - 1.0766, in which case, EURUSD could move lower to 1.0631 - 1.061 support.
USDJPY Daily Analysis
USDJPY (118.0): USDJPY broke above 118.4 support but has been posting a decline since yesterday. A daily close below 118.07 - 118 support could signal a sideways price action pattern between the noted resistance/support level and 116 lower support. On the 4-hour chart, price action continues to move lower with the Median line likely to act as dynamic support. A break of the Median line could see USDJPY test down to 117.395 support in the near term.
GBPUSD Daily Analysis
GBPUSD (1.42): GBPUSD is looking to retrace some of the gains made over the past three days with price action closing in a small body candlestick pattern yesterday. 1.418 is the key price level to watch for in the near term as a test of support here could see a short term correction in GBPUSD. The 4-hour chart shows the support level near 1.4192 - 1.4152 being retested for support. 1.4465 is the first target to watch for to the upside, while a break above this level could signal a stronger move to 1.49. To the downside, 1.41 will be the line in the sand as a break below this level could spark a new leg of declines.
Gold Daily Analysis
XAUUSD (1112.5): Gold prices remain bullish after closing yesterday in a bullish engulfing pattern. Price action has broken above the previous high and further upside is likely to continue towards 1115 level on a bullish flag continuation pattern. 1104 is the likely support level where prices could drop down to test for support ahead of further upside. In the event Gold fails to establish support at 1104, a move down to 1093 lower support is likely.
