Daily Forex Preview

EURUSD (1.06): EURUSD closed yesterday's session on a doji candlestick pattern indicating a potential move higher as long as the previous lows at 1.0592 is not breached. For the upside, a break above 1.0697 is needed in order for a test to 1.0825. On the 4-hour chart, with prices finding dynamic support on the minor falling trend line, the bias remains to the upside with 1.07 coming in as the initial support/resistance level in question. A break higher will pave way for a test to 1.0825 support to establish resistance.

USDJPY (122.3): USDJPY closed on a bearish note yesterday and the bull flag pattern looks to have been invalidated with prices trading below 122.595. USDJPY is currently testing the minor support at 123.3 on the 4-hour chart. If support fails, a decline to 121.921 looks evident. A modest rebound off 123.3 support could see prices recover back to 122.745, the previous short term pivot low that was formed. The bias in USDJPY remains to the downside, with the focus on 121.921 through 121.7 region of support. A break below could see a sharp decline to 121 support.

GBPUSD (1.51): GBPUSD declined yesterday as expected testing the lows of 1.509 region of support. Prices are currently bouncing off this support on the daily session and a retracement is likely in the near term. The breakout from the rising price channel 1.5239 saw prices dip to 1.505 before prices started to recover some of the losses. The failure to test the lower support at 1.5037 however indicates a retracement that could perhaps test back to 1.5239 break out level. To the downside, below the support at 1.50375, the next main support comes in at 1.50 followed by 1.4961 through 1.4942. The 4-hour Stochastics is printing a bullish divergence, which should see prices correct to 1.5173 at the very least.