GBPUSD, EURUSD and AUDUSD, H1
Eurozone services, composite PMIs unexpectedly revised higher. The Eurozone services reading was revised up to 55.2 from 55.0 reported initially and versus 53.8 in the previous month. At the same time, the June UK services PMI beat forecasts in rising to a headline of 55.1, the strongest rate of expansion since October 2017 and up from 54.0 in May.
The data along with the thin trading condition and the limited direction commitment have resulted into a mixed US Dollar trading. The Greenback is weak against Sterling since Sterling has rallied in the wake of the release today, while it is gaining some ground against the Euro and the Australian Dollar. GBPUSD returned above 1.3200, EURUSD dipped to 1.1635 and AUDUSD is consolidating around 0.7385. The Kiwi and Loonie follow Aussie’s path as commodity currencies.
AUDUSD is currently trading around 200-period in the 1-hour chart after it posted a 7-session high at 0.7424. The pair crossed into the lower Bollinger Bands pattern with a strong full body candle followed by a Doji candle. This, along with the fact that price remains above the confluence of PP level and 50-period MA, suggest that the bearish pressure might be short-lived. From the technical point of view, the momentum indicators support that negative bias is likely to be increased in the short term. RSI sloped below 50 and MACD falls below its signal line with the positive territory.
Hence, if the price closes below the 200-period MA at 0.7383 at the bottom of the hour, the next immediate Support holds at 0.7365, and if it breaks, this will open the way towards Monday’s lows. Otherwise, failure to sustain bearish momentum could result into a possible rebound back to 0.7415-0.7425 area.
EURUSD left 2-day’s high at 1.1681 and tumbled close to S1 at 1.1630, despite the unexpected upward revisions to final Eurozone June services. The Common currency has declined for 3 consecutive hourly sessions, breaking below all 3 MAs with the lower Bollinger Bands pattern extending to the downside. Regardless of the negative hourly momentum, the pair is still holding above yesterday’s low and above today’s immediate Support level at 1.1620. Hence a decline below S1 could meet the week’s low and latest low fractal at 1.1590.
Momentum indicators in the hourly chart support the intraday negative momentum with RSI looking towards oversold area and MACD dipped to neutral zone below its trigger line, suggesting that negative momentum is likely to get stronger in the short term. Resistance levels hold at 1.1650 and 1.1675.
Overall, the EURUSD remains in broadly consolidation phase after a downtrend from mid-April levels above 1.2400. The range over this phase has been 1.1508 to 1.1851.
Lastly, the Pound ticked higher following the release of an above-forecast UK services PMI survey for June. GBPUSD rebounded from 1.3170 and is currently trading up to 1.3216. In contrast to the Euro and the Australian Dollar, the Pound remains within bullish intraday phase, since it manage to be held above all 3 hourly MAs. The pair rebounded from PP level and it continues developing an uptrend within the upper Bollinger Bands pattern. Momentum indicators continue to endorse an upside movement. RSI is sloping higher towards 70 barrier, while MACD is flattening above neutral and below its signal line.
Therefore if the Cable manages to rally higher above R1 at 1.3226, the next Resistance comes at 20-DAY MA at 1.3260. A break above this key level could imply to a possible ending of a 3-month downtrend.
In the long term, the Cable remains somewhere between bearish and neutral. The Brexit negotiation process, which has just six negotiating weeks left, is coming to a head amid a sense that risk of the UK leaving the EU without a new trade-deal has gone from highly unlikely to possible.
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Andria Pichidi
Market Analyst
HotForex
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