General analysis about forex market: 2nd January – 6th January
GBPUSD Technical analysis:
The GBPUSD pair showed some decent bullish movement in the last trading week after hitting the critical support level at 1.21963.The gained its bullish momentum in the market after the US dollar index slipped from its 14 years high in the market. However, the bullish move in the GBPUSD pair faded after hitting the critical resistance level at 1.23874.If the pair manages to break the critical resistance level at 1.2374 then we will see nice decent bullish move in the GBPUSD pair towards its next critical resistance level at 1.25387.This level is going to provide a significant amount of selling pressure to the GBPUSD pair and most of the professional price action traders will be looking to sell this pair at this level with bearish price action confirmation signal. However, a clear break of the price above that level will bring strong bullish momentum in the market towards the next critical resistance level at 1.27697.
If the green bucks gain its strength back in the market then we will see a sharp drop in the GBPUSD pair. The first initial bearish target for the GBPUSD pair would be the next key support level at 1.21963.This level is going to provide strong bullish pressure to the GBPUSD pair but a clear decisive break of that level will bring a strong bearish momentum in the market. If the critical support level at 1.21963 fails to restrict the bearish move in the market then the pair will ultimately hit its next key support level at 1.20688.This level is going to play an important role in the GBPUSD pair since if the pair falls below this level then we will see a large drop in the near term future.
NZDUSD technical analysis
There has been a nice bullish recovery in the NZDUSD pair in the last trading week but the price sharply fell in the market during the Friday after hitting the critical resistance level at 0.69783.Professional traders are thinking that the price will drop furthermore since there has been a formation of the bearish engulfing pattern in the daily chart of the NZDUSD pair. The first bearish target for the NZDUSD pair is the critical support level at 0.68609.This level is going to provide a significant amount of buying pressure to the NZDUSD pair but if the pair falls below this level then we will see a strong bearish move in the NZDUSD pair. The pair will participate in a free fall until it hits the next critical support level at 0.66770.
Most of the professional traders will be looking for a bullish price action signal to enter long in the NZDUSD pair at that critical support level. If the support level at 0.66770 restricts the current bearish move of the pair then we will see another bullish correction in the NZDUSD pair. Fundamentally the dollar remains broadly stronger against it all major rivals in the forex market.In the upcoming week the pair is most likely to fall due to the formation of a bearish engulfing pattern on the daily chart. On the contrary, the FED has declared that they are going to raise their interest rate in the next year for three times. Such an optimistic statement from the FED in the last FOMC meeting minute gave the dollar a solid ground in the global economy. To be precise the NZDUSD pair is most likely to fell in the next trading week. Considering all the technical and fundamental parameter we have no interest in buying this pair. We will look for selling opportunity in this pair with bearish price action confirmation signal.
EURUSD Technical analysis
The EURUSD pair tried to rebound in the last trading week and tried for a bullish recovery in the daily chart. During the event of its bullish run, the pair tested a critical resistance level at 1.0652.However the price again sharply dropped in the market and closed near the 1.0515 level. The EURUSD pair has dipped near about 1000 pips after the United States precedency election since the dollar was broadly supported in the global economy upon Mr. Trump statement. Most importantly the EURUSD pair has broken every critical support level in the market since the dollar has gained an immense amount of strength in the global market in the last FOMC meeting minute. The FED went for rate hike on 25 basis point and give the dollar its strongest boost for the year 2016
In the last trading day, price traded above the key resistance level at 1.0600 level. The broken trend line worked as a strong resistance at this level. Though the pair rallied high during its bullish retracement but after hitting the critical resistance level the buyers lost their bullish momentum in the market. The pair broke the 100 and 200 hourly moving average. But the price could not hold its bullish run. In the next week, we might see another bearish movement for this pair however the price might break this hourly moving average in the next trading week. The closest support zone for this currency pair is at 1.0468 – 1.0450 level. This support zone might hold this pair but the pair is in a bearish mood. Seller has more control over the buyer. So we might see a sharp fall from this critical support level. The next support level is at 1.0350 level. If the pair manages to break this level then we might see a strong decisive movement in the EURUSD pair in the near term future. Considering the technical and fundamental parameter the over bias remains bearish for the EURUSD pair.