The CADJPY found support at the long term 78% retracement and came very close to the 127% Fibonacci extension of the summer move higher. The fact that we probed through horizontal support and closed near the breakdown point at the 80.00 level may leave room for a sharp rally as shorts look to cover.
The EURAUD reversal from new trend highs is pretty spectacular. First of all, this is a bearish engulfing candle. Secondly, we rejected the 161% Fibonacci extension of the last move lower in May. Third, the 78% retracement of the 2019 range was also rejected. Lastly, a horizontal level from mid 2018 was also respected. The risk for this pair is lower near term.
After breaking the long term 1.5 year trend line and 200dma, the pair is back to test the 200dma once again and the underside of the broken trend line. In other words, this is a make it or break it level for the bulls. A failure here could pave the way for the .9800 level, and a break higher could challenge 1.0100 once again.
The EURGBP is testing the 200dma and the 50% retracement at the .8782 level and is possible that overnight we test the 161% extension at the .8803 level. However, with the RSI overbought and leveling out the risk may be for a reversal lower from the .8800 level near term.
Ahead of the ECB decision the German 10yr bund is at an inflection point with the 166.66 breakout point and channel support being tested. This goes without saying, a break below is bearish, but a pivot from here keeps the bullish momentum alive. RSI was divergent and signaled the turn two weeks ago, but with daily RSI back to mid range, it could go either way now.
One of our traders in our Forex Analytix community chat rooms (guyr) brought the EURNZD inverted head and shoulder's pattern to our attention. Not oily is that set up, but we are above the downtrend line and also with the false breakout three weeks ago below the 1.6300 level the risk of a turn higher is....well, high. A move above the 1.6630 level on a closing...
We are not sure if the upper end of the 1.9000-1.9550 channel will be broken, but it is a risk this time around as the GBP is starting to look constructive against other pairs as well. A move above the resistance could send the pair quickly to the 1.9900 level to challenge the up channel longer term resistance which would be the 161% extension of the range.