EURGBP immediate resistance at 7830/35 is key to direction today

Daily Forecast - 22 December 2014

EURGBP Spot

EURGBP immediate resistance at 7830/35 is key to direction today. Failure to get back above here re-targets 7810/05 but the outlook is negative so a break lower could be expected & targets November lows at 7795. If this does not hold the downside we risk a retest of September/October lows at 7761/58.

Only above 7830/35 is less negative for today & opens the door to a test of resistance at 7855/60. Try shorts with stops above 7870. If the pair unexpectedly continue higher look for 7895, perhaps as far as a selling opportunity at 7905/10. Try shorts with stops above 7930.

EURUSD

EURUSD bottomed at 1.2219 which is also 4 year trend line support. This therefore is extremely important. The pair are oversold short term & this is the best chance bulls have to mount a strong defence & halt the decline. Never the less, be ready to go with a break below 1.2200 & use resistance at 1.2220/30 to get back in to shorts for a move towards trend line support at 1.2185 & perhaps as far as NINE YEAR trend line support at 1.2135/25.

If we do manage a recovery, above 1.2245 is more promising & opens the door to a test of first resistance at 1.2275/80. A high for the day possible but shorts need stops above 1.2300. If we continue higher look for a test of the next resistance at 1.2335/45. Shorts need stops above 1.2370.

GBPUSD

GBPUSD outlook remains negative with 1.5635/40 the key to direction. Failure to get back above sees a test of support at 1.5605/00 but be ready to go with a break lower today to target 2 week lows at 1.5543/1.5539. With the outlook negative a break lower would not be a surprise this week & could target 1.5510/00 & perhaps as far as 1.5435/30. If we continue lower this week we meet important longer term Fibonacci support at 1.5360.

Look for strong resistance at 1.5680/90 again today & a good selling opportunity with stops above 1.5710. However an unexpected break higher sees 1.5690/80 act as support for a move towards 1.5740/50 for a selling opportunity with stops above last week’s high at 1.5785.

Gold February Contract

Gold February contract has immediate support at 1190/1189 & we should hold here initially at least but the outlook is quite negative so be ready to go with a break below here to keep the market under pressure & target support at 1182/80. Try longs with stops below 1176. A break below 1180 this week however is very negative & could accelerate moves to the downside. Be ready to go with a break lower to target 1172 then 1169/68 & perhaps as far as 1164/63.

Holding above 1190 opens the door to a recovery to 1201/1203 today. It could still be worth trying shorts again with stops above 1206. Be ready to go with a break higher again however to re-target strong resistance at 1212/1213. Look for a high for the day here and try shorts with a stop above 1216.

USDCAD

USDCAD must now hold above 1.1605/10 to stage a recovery this week & beat resistance at 1.1640/1.1645 to retest last week's high at 1.1672. However we may now be ready for a correction in to year end & a good chance therefore that this level will hold a move higher this week. Try shorts with stops above 1.1700. We need at least break & A CLOSE ABOVE 1.1680 to continue the bull run higher & target 1.1759 today. Further gains this week target 1.1816/20.

Immediate support at 1.1565/60 is key to direction but a break lower is more likely today with potential for the outlook to turn more negative this week & targets 1.1535/30 then 1.1510. Below here look for a very good buying opportunity at 1.1500/1.1490. Try longs expecting a low for the day, with stops below 1.1470.

USDJPY

USDJPY outlook remains positive as we resume the bull trend & hit our target of 119.45/50. We wrote: ‘a high for the day possible as we become overbought short term’ & the pair topped at 119.62. Outlook remains positive but 119.65 is the main challenge today. Be ready to go with a break higher using 119.50 as support for a move towards 119.90/95 then 120.11/18.

The pair are overbought short term & failure to beat 119.65 should trigger profit taking & a move lower towards 119.03/118.98. Try longs with stops below 118.70. If we continue lower look for 118.40/35 then a buying opportunity at 118.10/00, with stops below 117.70.

AUDJPY Spot

AUDJPY immediate resistance at 9725 but above here re-targets 9765/9775. Outlook is more positive this week so be ready to go with a break above 9775 today to target strong resistance at 9800/9810. Try shorts with stops above 9840. Once again we must be ready to go with a break using 9810 as support as this is a very positive signal. We should target 9855 then 9875/78 & perhaps as far as strong resistance at 9900/10 for a short term selling opportunity.

Immediate support at 9720/10 could hold the downside now but below here targets 9665/60 then good support at 9630/9615.
This area should hold the downside and is worth trying longs with a stop below 9595. A break lower however sees 9615/9620 act as resistance for a move down to 9570 then 9550/9545. Any further losses risk a retest of this week's low at 9529/9518.

AUDUSD

AUDUSD same levels apply for today in the bear trend & despite oversold conditions outlook remains negative. Watch immediate support from last week’s low at 8114/04 & be ready to go with a break to target the 2010 lows at 8086 & 8065.
Yearly lows are obviously important & could hold the downside today being so oversold. Try longs with stops below 8040.
However be ready to go with a break lower in the negative trend to target 8005/7995 then important longer term Fibonacci
support at 7945.

Any recovery looks limited with immediate resistance at 8160 but above here a selling opportunity at 8200/8210. Try shorts with stops above 8240. Only a break above 8220 turns the outlook more positive & targets resistance at 8265/70. Unlikely any higher at this stage but look for a selling opportunity at strong resistance at 8292/97. Try shorts with stops above 8320.