EURUSD is leaning heavily on the critical support of 1.900, the EUR capitulated while the dollar continues to strengthen across all pairs. Thursday saw the EUR break free from an ascending channel and horizontal support around 1.200 and moved down to 1.1900. A daily close below 1.1900 will expose 1.175 and 1.1600
Daily time frame
GBPUSD broke out of an ascending channel on the 24th of February 2021, the problem with this kind of break is that it happened from the top of the channel; this kind of breaks usually turn out to be traps. Since the cable has broken back into the channel, it is heading to challenge 1.3750 support.
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It is also a rule of thumb that false breaks like this most likely produces an extended move in the opposite direction. That said if we get a daily close below 1.3750 and channel support around 1.370 that leaves the 1.3480 and 1.32545 exposed.
Factors supporting this bearish correction can be found on the weekly time frame were the last two sessions representing the false break on the daily time produced a pin bar and last weeks confirmation of that pin bar. The 10 EMA is poised to break below 20 EMA which will further confirm the bearish correction.
Daily time frame
EURNZD has featured here for some weeks now, since the confirmation of the head and shoulders in January. Today the pair has successfully touched 1.633 support and that’s where things are looking tricky. The pin bar that formed there cannot be overlooked and neither should the bearish pattern. It might turn around and retest the neckline before continuing to move down. This pin is not what I would buy rather it should be used to find selling opportunities.
A close above 1.680 will expose neckline line resistance around 1.700 While a close back inside the neckline will negate the head and shoulders.
A weekly close below 1.634 will keep the bears in place or a sell signal from either 1.680 or 1.700 will mean the bearish momentum is still intact.
Weekly time frame
XAUUSD
Gold continued to slide within the descending channel I discussed weeks ago and currently testing 1.680 confluence of the support area. I would like to state that this being a descending channel a break below it should not be something to sell in a hurry. Reason being that this a bull flag, such breaks might turn out to be a trap just like what happened with GBPUSD.
This a must hold level for buyers, a break below 1680 will be bad for bulls in a situation that we see gold close below 1680 and sellers defends it successfully as resistance, that might mean that gold is headed much lower into 1586 followed by 1515.
A bounce from 1680 will keep it within the channel with 1770 acting as resistance followed by 1850.
Daily time frame
By: Chijioke Maduakor
