Strategic trade
Trade view / 11 July 2016 at 9:45 GMT

A medium-term view on the majors

Analyst / PIA First
United Kingdom

I am struggling to find one particular pair/cross that stands out today so have instead decided to do a weekly update on all the majors. 

USD Index: Punchy numbers for the nonfarm payrolls release last Friday; the retest of the intraday breakout channel is now complete and the bias remains bullish. 

There are numerous Fibonacci confluence areas on the way up, so we expect trading to remain mixed and volatile. The next stop (a pause, we think) is 97.09-97.27. Current price is 96.68.

USD index (one-hour, channel retest):
USD Index 1
Source: Saxo Bank
USD index daily (Fibonacci confluence areas):
USD Index D
Source: Saxo Bank 

EURUSD: Posted a bearish Outside Day on July 5 after retesting the expanding wedge breakout. Like the USD index, we have numerous Fibonacci confluence areas to contend with, the next being 1.0962-1.0952, then 1.0782-1.0771. 

We are sellers today but do not see any upside resistance until 1.1100 so there is scope for a mild morning rally (a correction).

EURUSD daily (Fibonacci confluence):
Source: Saxo Bank 

GBPUSD: The next downside barrier for GBPUSD is the 78.6% pullback level of 1.2673. There is nothing to highlight a reversal pattern here (Gartley etc.) so we could extend down towards 1.1593-1.1410 area over the medium term. 

The only concern with this outlook is that we think EURGBP is due a correction soon (lower) and GBPJPY has posted a 13 count on the weekly chart. I think the move up in that cross will be more yen weakness than GBP strength. 

GBPUSD monthly (downside targets):
Source: Saxo Bank
USDCHF: Posted an intraday DeMark 13 exhaustion count (four-hour chart) at Friday's high. This coincided with the descending trend line from January and May. Although this stalled the bulls, with a bullish Outside Day at the base and the weekly chart highlighting a bull count, buyers should stay in control. I am looking to buy into dips. 

The prime support is 0.9800 today but we might not get there. Looking for a move to 1.0274 over the long-term. 

USDCHF daily (trendline resistance):
Source: Saxo Bank

JPY: For all yen crosses see Friday's report.

USDCAD: Moving higher towards the AB=CD formation target of 1.3370. Friday's price action has paused and corrected from the trend of daily highs (from May 24 to June 27). However, we are about to break this trend as I write. Looking to buy into dips (if we get any). Intraday support at 1.3040

USDCAD weekly (AB=CD target):
Source: Saxo Bank

EURGBP: Has broken and held above the trend of lower weekly highs (from Q1 2013 to Q3 2013). We are looking overbought but this timeframe (weekly) shows no signs of slowing. 

The one-hour chart highlights the cross trying to break out of the triangle or channel formation to the upside. The next barrier is the 261.8% extension of 0.8662 (from 0.8202-0.8378). 

EURGBP weekly (break of trend):
Source: Saxo Bank

EURGBP (one hour, breaking the trend and 261.8% extension):

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Source: Saxo Bank

— Edited by Michael McKenna

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11 July
goldfinger goldfinger
Apologies if I have misread your euro£ charts but my understanding from last week was that you were looking for a break of 8475 to head towards 80 the figure. now you appear to be looking for a break to the upside towards 8662. is that correct?
11 July
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
sorry for the delay. I think there is scope for a move up towards the 261.8% extension. Obviously, Thursday is a massive day for GBP and we could consolidate going into that


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