GBPUSD: Bearish momentum starts to fade

Yann Quelenn Swissquote Bank Ltd

EUR/USD

Selling pressures increase around 1.0600.

EUR/USD failure to test 1.0653 (30/12/2016 reaction high) resistance has led to a mild correction towards 1.0506 support. Next hourly support lies at 1.0341 (03/01/2017 low). Expected to see continued further monitoring of the resistance area around 1.0600.
In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD

Bearish momentum starts to fade.

GBP/USD is heading downwards towards hourly support at 1.2083 (25/10/2016 low) while hourly resistance lies at 1.2268 (intraday high). The technical structure suggests further downside.
The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY

Short-term downtrend channel.

USD/JPY is still bouncing on former resistance given at 114.83 settling in current 2-month 116.12 to 118.66 range. Hourly support lies at 114.74 (12/12/2016 low). Expected to see further range trading.
We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

Author

Yann Quelenn

Swissquote Bank Ltd

Yann Quelenn is a Market Analyst at Swissquote Bank with strong technical and financial background. Previously, he worked as FX Trader at Banque Privée Edmond de Rothschild and as Portfolio Manager at Polaris Investment in Luxembourg.

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