Daily Insights Report 28/06/17

• 28 Jun 2017

GBP/USD

The GBP/USD pair has entered a descending channel and the long term direction of the pair will be determined by the pair’s ability to break the upper trend line, at 1.282. The pair has broken the 30-day exponential moving average with a strong bullish candle. RSI indicates that near-term momentum is bullish yet MACD remains negative.

Impact event: Bank of England Governor Carney speech at 16:30 GMT+3.

USD/CHF

The USD/CHF pair experienced a significant sell-off in yesterday’s trading session with price action breaking both the 20-day EMA and the lower Bollinger band. Fed Chair Janet Yellen remarks provided no support for the dollar which fell following her speech. The ultimate direction for the pair from this point will likely be determined by the next candle. RSI has leveled flat at the oversold area and MACD remains negative.

Impact event: U.S. Pending Home Sales at 17:00 GMT+3.

EUR/USD

The Eurodollar surged as a result from positive comments by ECB President Mario Draghi yesterday. The path of the Euro followed a similar but opposite path to the USD/CHF; breaking both the 20-day EMA and the upper Bollinger band. The question is whether the Euro can go higher: RSI has flattened at the overbought 70 area; however volume did spike yesterday indicating increased trading activity in the pair. With the Euros reaching the highest level since November 2016, it appears likely that there will be some retracement soon.

Impact event: ECB President Mario Draghi speech at 16:30 GMT+3.

USD/JPY

The USD/JPY has reached a potential bearish reversal territory. The pair has reached and found some resistance at the 61.8 Fibo level. The bearish ‘hanging man’ candle at the top of the uptrend (in the current trading session) could signal a reversal. RSI confirms the downward momentum. For the reversal to be confirmed, price action would need to break the 61.8 Fibo level to the downside with support from momentum indicators.

Impact event: Bank of Japan Governor Kuroda speech at 16:30 GMT+3.