EUR/USD
The EUR/USD enjoyed a massively bullish candle this past week, and has stopped just at the 1.40 handle. This area has served as a support and resistance area historically, and appears ready to do so again. The bullish bar broke through all hints of resistance at the 1.38 level and appears to be primed for a small pullback, followed by a run all the way to 1.45 and 1.50 before it’s all said and done. Of particular interest will be the ECB’s statement after April’s meeting which is now expected to see a small rate hike. Any suggestion of further hikes will make this pair run hard to the upside.
EUR/JPY
The bar this past week has been very bullish in this beaten down pair. The 115 level is significant resistance, and happens to be the 50% Fibonacci level from the latest move down. Once we get a daily or weekly close above the 115 level, we could see a run all the way back to the original meltdown at 125. The measurement of the recent consolidation suggests a 900 pip run, which will be at roughly 124.50 or so.
USD/JPY
This pair isn’t following the EUR/JPY recently. Of course, the ECB’s comments are helping the EUR against all currencies. The pair normally suggests the level of risk that traders are willing to take. Normally as risk becomes interesting to traders, this pair gets bid up. However, this hasn’t been the case over the last 2 years or so.
The wedge that we are in keeps a neutral bias on this pair, but there could also be a pennant forming and a target of as low as 66 could be in the cards, which is a very ridiculous level. However, if we break the wedge to the upside, it could be very supportive for this pair. This pair is very confused at the moment, and until we get a solid break out of the wedge, should be avoided.
USD/CAD
This pair has obvious support between the 0.97-0.98 level, and it appears that even though we have held at this level, pressure is building for a breakdown. If we get a solid break below the support level, the first stop will be 0.95 and then onto 0.90 as well. Of course, there are some people willing to buy this pair at this level, but with the runaway in the oil market – it would be folly to short the CAD under any circumstances at this moment.
AUD/USD
The Aussie has found the “parity” level quite comfortable over the last few months, and it appear that it is going to hold as support now. The last few weekly candles have been a hammer, and a doji. Both of these never seriously tested the “1” level, and now show the level to be supportive in nature.
It should be noted that the 1.02 has been very resistant to upward movement, but it appears that the pair is heading for a run above the 1.02 level.
AUD/CAD
The Aussie looks very similar against the CAD as the USD. It looks like a flag is forming that has the possibility of pushing this pair northward by another 1,500 pips! This is surprising as oil is being bid up by so much now. But of course the Aussies have commodities in massive amounts, and the Canadians may be getting punished for their close proximity and reliance on the US economy.
The 0.98-0.99 level has been very supportive, and the weekly candle that just closed does nothing to suggest otherwise as it formed a bit of a hammer. With the projected breakout, a possible target of 115 may be in the cards for this pair. A short is highly discouraged until a break of 0.95 happens.
