Daily Forex Market Preview, 2/23/2016
Losing over 2.0% at one point, the British Pound managed to recover some of the losses but closed on a bearish note yesterday. Prices are back to testing the 1.41 handle this morning but there is a scope for a rebound in prices in the near term. Meanwhile, the Euro also weakened against the Dollar yesterday trading just above the 1.10 handle. Further downside is likely in EURUSD which could potentially test the lows of 1.095 region. Today's main event risk from the SNB Chairman, Thomas Jordan's speech in Frankfurt.
EURUSD Daily Analysis
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EURUSD (1.10): EURUSD turned bearish yesterday and briefly traded near a 2-week low just above 1.10 support. Having broken the support zone near 1.113 - 1.1105, EURUSD could see further declines to 1.095 - 1.093. However, in the event that prices move to the upside, the rally is likely to be met with resistance near the recently broken support zone. Only a close above 1.113 will confirm any further upside bias in EURUSD. To the downside, below 1.093, there is a scope for a decline to 1.0825. The Stochastics oscillator is showing a bullish divergence which is likely to see EURUSD attempt to retest the broken support near 1.113 - 1.1105 to establish resistance.
USDJPY Daily Analysis
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USDJPY (112.2): USDJPY continues to decline lower following through from last week's price action. Prices are currently close to the 112 support level following a break which could see 111 coming into the picture. The daily chart shows a potential bullish divergence being formed in USDJPY which could see a move to 117 resistance, but will be confirmed only on a bullish close off the 112 mark. On the 4-hour chart, following the hidden bearish divergence, price action is forming a bullish divergence off the current lows. A close above 113 could signal a continuation to 117, which would see the previous support level being tested for resistance..
GBPUSD Daily Analysis
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GBPUSD (1.41): GBPUSD broke down below the 1.42 handle yesterday and there could be further downside in store with a potential test to 1.40. The daily chart however shows the Stochastics not confirming the lows by printing a higher low, which points to a potential rally in the near term, towards 1.4635 resistance. On the 4-hour chart, a retest to 1.41 is likely and if the correction starts, a test to 1.43 is on the cards in the near term. Only a close above 1.435 will signal further upside to 1.4635.
Gold Daily Analysis
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XAUUSD (1216): Gold prices are recovering after posting two days of declines. Price action remains bearish however in the longer run with the bearish divergence building up strongly as the Stochastics fails to confirm the highs in Gold. A correction to 1110 is possible provided Gold manages to break below the initial 1200 handle followed by 1150. 1225 - 1230 makes for a minor resistance level and as long as prices do not close on a daily time frame above this level, the bias remains to the downside. Above 1230, a retest to 1250 is possible.
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