AUDUSD has bounced to first resistance at 7170/75

Daily Forecast - 06 January 2016

USDJPY Spot

USDJPY 118.95/90 & holding here has triggered a recovery to minor resistance at 119.12/15. Further gains today meet the main challenge for bulls at 119.40/45. The pair are oversold & in need of a recovery rally so if we can get through here we can target minor resistance at 119.65/69 then strong resistance at 119.85/90 for profit taking on all remaining longs. A good chance of a high for the day. Try shorts with stops above 120.10. Just be aware that a break higher targets 120.21/25 then a selling opportunity at 120.40/45.

Failure to beat 119.15/12 retests support at 118.90/85. Try longs with stops below 118.65. A break lower however sees 118.85/90 act as strong resistance to target 118.60 then 118.45/41 & October lows at 118.04/00.

AUDUSD Spot

AUDUSD has bounced to first resistance at 7170/75. A break above here this morning re-targets next resistance at 7205/10. Gains are likely to be limited despite short term oversold conditions, but if we continue higher look for a selling opportunity at 7235/40. Shorts need stops above 7260.

Failure to beat first resistance at 7170/75 targets 7155/50 then minor support at 7130/27. If we continue lower look for strong trend line support at 7117/12 & a buying opportunity. Try longs with stops below 7090. However be ready to sell a break below 7090 to target 7070/65 & perhaps as far as 7025/20.

EURGBP Spot

EURGBP first resistance at 7333/35 so above is more positive & targets stronger resistance at 7350/55 for profit taking. This is the main challenge for bulls today but shorts need stops above 7365. A break higher targets minor resistance at 7375/78 then 7392/95.

First support at 7319/15 which could hold the downside again today. Longs need stops below 7300. A break lower sees 7315/19 act as strong resistance to target 7290/88 & perhaps as far as strong support at 7260/56. Try longs with stops below 7245.

EURUSD Spot

EURUSD seems to have stabilised above support at 1.0739/35 & this is key to direction today. We are now oversold & will need to hold above here to build a recovery. First resistance at 1.0775/79 but above here targets stronger resistance at 1.0815/19. We could try shorts with stops above 1.0840. However be ready to buy a break above here to target strong resistance at 1.0881/85. Try shorts with stops above 1.0905.

Longs at 1.0739/35 need stops below 1.0710. A break lower is negative despite oversold conditions & could target 1.0690/87 then 1.0677. If we continue lower look for a test of minor support at 1.0650/46.

GBPUSD

GBPUSD severely oversold after 3 weeks of losses so the downside could be more limited, but we stick with the bear trend while we watch very carefully for a positive signal. Minor resistance at 1.4685 but above here stronger resistance at 1.4715/19. This could hold a rally, this morning at least but shorts need stops above 1.4735. On a break higher we could target a selling opportunity at 1.4770/75. A high for the day is expected if we reach this far but shorts need stops above 1.4800.

Failure to beat minor resistance at 1.4685 keeps the pressure on for a retest of 1.4635/30. Further losses this week target 1.4585 & from here down to the 2015 low of 1.4563 is very important indeed. Try longs within this band in such oversold conditions but we need stops below 1.4550. Obviously a break & CLOSE below 1.4560 keeps bears in control & initially targets 1.4529/25.