May 20th – 24th

EURUSD – Smooth lower swing high triggered on this exchange rate – which is clearer to view from the daily perspective as price re-tests 1.12581 supply area for EUR.

The formation in play here is quite straight forward, discerning the major bearish turning point was the key as we can expect price to re-visit the previous low at 1.1139 – however, a re-test of 1.11856 is also likely before further EUR devaluation occurs.
GBPUSD – Evident USD demand within the last two weeks as market participants continue to sell their sterling for USD – there has been a significant amount of deviations from our major regional zones – with no attempt to pull-back and re-visit as new supply for GBP.

I say it has been USD demand, and not only sterling weakness because we’ve witnessed all USD denominated currency pairs decline – especially throughout last week. 1.2800 is a vital new SUPPLY area for this exchange rate – will be interesting to see the price action indications being signalled out as we expect a re-test at this zone. Minor sterling appreciation is on the cards, a pull-back would make sense from this point going forward to re-visit all of the new supply zones from 1.28000 to 1.28924

May 13th – 17th

GBPJPY – Similar to cable, significant sterling devaluation against the Japanese Yen has also emerged throughout last week – expressing how keen market participants were on selling their sterling. GBPJPY is more interesting in that we have deviated from more than just a few major zones – from 144.977, 144.232, 143.212 which are all very critical regional zones for this exchange rate. 

The 144.212 zone is the supply zone which we’ll be focusing on as a pull-back is expected to re-visit this region. Assessing market behaviour as price climbs into this region will quite critical. Given the fact that there are no major economic news today reinforces the natural supply/demand flow of this exchange rate – amongst the others. Furthermore. sterling devaluation is on the cards on GBPJPY also – 141.672 is the next zone which we feel price is headed next. 
Dow Jones (US 30) – Very interesting last few weeks of price action on this index as price re0visits the area of the a time highs and actually fails to create a new high (even though S&P did the opposite). Now after this rejection from the 26681 zone, we’ve seen a shift in momentum – a closure back below the dynamic area of previous support has also occurred which contributes towards a confirmation of a shift in momentum.

Now further decline is actually expected on this instrument, however – the 26166 is due for a re-test ( notice how this also coincides with our dynamic area). In technical terms, a lower swing high is on the cards before price declining further towards 25309, which is approximately 560 PIPs from the re-test of 26166.

GBPUSD – Significant last few trading days of USD demand as we’ve witnessed price reverse from 1.31735 – which has proven to be a significant supply area for sterling. Not surprisingly, price has travelled towards the psychological barrier @ 1.3000 – we actually closed at this specific price on Friday which was interesting. It contributes more towards how keen market participants were on the USD demand throughout last week. 

First crucial factor is the closure black below the dynamic area of previous demand – a false break above this same zone acting as new supply has also occurred – which is ADDED confluence for a further move south on this exchange rate. 1.30237 is the current vital supply zone in which we’ll be assessing as price re-visits this region as there are shorting opportunities from this zone. As a result, further sterling devaluation is on the cards to re-visit the 1.29454 demand barrier.