EUR/USD

Even though rebounding to 1.2188 on Monday, EUR/USD's fall from 1.2322 quickly resumed and extended further. Friday's brief recovery was also limited by short term falling trend line and fall accelerated after failing to break above, reaching as low as 1.1967, pressing mentioned cluster support at 1.1981/85 (61.8% retracement of 1.776 to 1.2322 at 1.1985 and 50% retracement of 1.1639 to 1.2322 at 1.1981).

From a bigger picture, the rising trend line (now at 1.1922) remains critical as a strong rebound from there that pushes EUR/USD above 1.2113 resistance will still favor that the fall from 1.2322 is just part of consolidation to the rebound from an important medium term low of 1.1639. Such rebound should extend towards 1.2587 resistance upon completion of the current consolidation from 1.2322. However, a strong break below this rising trend line will indicate further weakness is to be seen in medium term that will bring EUR/USD further lower to 1.1776 cluster support (with 78.6% of 1.1639 to 1.2322 at 1.1785) or lower.

From a short term angle, bullish convergence is still possible in 4 hours MACD. Also, 4 hours RSI will be reaching oversold region again on next dip. Hence downside could be contained by the rising trend line (now at 1.1922) initially next week for a recovery. Above falling trend line (now at 1.2090) will suggest at least a consolidation has started for 1.2113 resistance. But still, short term bias remains on the downside as long as this 1.2113 resistance holds.

GBP/USD

After rebounding to 1.7858 and range trade for most of the week, cable followed other majors and resumed fall from 1.7935 on Friday, reaching as low as 1.7593 so far, touching 55 days EMA. At this point, bias remains on the downside initially next week for cluster support at 1.7521 (with 50% retracement of 1.7130 to 1.7935 at 1.7533).

This cluster support of 1.7521 will be critical from medium term angle. Strong rebound from there will suggest price action from 1.7935 is possibly forming sideway consolidation to the rebound from 1.7130 only. And further rally to 1.8498 level should be seen after such consolidation. However, a firm break below 1.7521 will indicate medium weakness should push cable further lower towards rising trend line from 1.7047 to 1.7130 (now at 1.7227).

From a short term angle, we may see recovery early next week due to oversold condition as displayed with RSI being oversold. Touching of 1.7713 will turn outlook consolidative but a break above falling trend line (now at 1.7792) and ideally, a firm break above 1.7813 is needed to turned short term outlook bullish. Otherwise, bias remains on the downside and fall should resume after recovery.

USD/CHF

Similar to EUR/USD, even though USD/CHF's rally from 1.2556 on Friday and rose strongly to as high as 1.2995. pressing mentioned fibo resistance of 61.8% retracement of 1.3283 to 1.2556 at 1.3005. From a bigger picture, bouncing off from 1.3005 that pushes USD/CHF to below 1.2835 support will suggest the current rebound from 1.2556 is just a correction to the fall from 1.3283 and hence, such decline should resume upon completion of correction towards 1.2239 support.

A firm break above 1.3005 will suggest further strength should be seen in medium term that could push USD/CHF towards next projection target of 100% projection of 1.2556 to 1.2897 from 1.2738 at 1.3079 first. However, a firm break above 1.3005 will suggest further strength should be seen in medium term that could push USD/CHF towards next projection target of 100% projection of 1.2556 to 1.2897 from 1.2738 at 1.3079 first and probably retest of 1.3283 high later.

From a short term angle, bearish divergence is still possible in 4 hours MACD and RSI will be reaching overbought region again on next rise. Hence, upside could be limited by 1.3005 fibo resistance initially next week for a pullback. Below short term rising trend line (now at 1.2869) will turn outlook consolidative with risk of retreating towards 1.2835 support but short term bias remains on the upside as long as 1.2835 support holds.

USD/JPY

USD/JPY's strength continues last week and reached as high as 119.37, almost 600 pts from 113.41 low. This is inline with our view that the current rally from 113.41 is at the same degree as the fall from 121.38. At this point, USD/JPY should be heading towards next upside target of 78.6% retracement of 121.38 to 113.41 at 119.67.

From a short term angle, as bearish divergence condition is still possible in 4 hours MACD and RSI will be back to overbought region again on next rise, upside could be limited by this fibo resistance of 119.67 and turn USD/JPY into consolidation. However, a drop below 118.35 support is needed to confirm consolidation has started. Otherwise, rally is still in progress. Break of 119.67 will encourage further rally to retest 121.38 high.

On the downside, below 118.35 will encourage retreat towards 117.79 resistance turned support and a break below will suggest the whole rally from 113.41 has completed and turned into consolidation at least. Otherwise, short term bias remains on the upside and rally should resume sooner rather than later.