This week, the US Dollar fell sharply against JPY and CHF primarily lead by the minutes from the Federal Reserve’s March 18-19 meeting, which changed market expectation of the first interest rate hike even if the US unemployment rate dropped below 6.5% threshold.
The US Dollar is now headed for its first weekly loss against JPY and CHF in last four weeks. Given the backdrop, here is a technical update on USDJPY and USDCHF currency pairs.
For Technical Update on EURUSD, GBPUSD and NZDUSD, READ: Important Major Currency Pairs – Technical Update
- After a decisive drop below 100-day SMA support near 103.00 mark, the pair dropped sharply below 102.00 level confirming a break below a short-term ascending trend-channel formation on daily chart. From current levels the pair seems more likely to continue its depreciating move towards a very strong support near 101.00-100.80 zone, comprising of 200-day SMA and an ascending trend-line support extending from Feb. 2013 through June, Oct. and Nov. 2013 lows. Moreover, a decisive break below 101.00 support region, marking a break below the ascending trend-line support, could infuse additional near-term weakness for the pair initially towards 100.00 psychological mark, also coinciding with 61.8% retracement level, and further towards 99.30 horizontal support.
- However, should the pair manage to rebound and move back above 102.00 area, previous intermediate support now turned immediate resistance, the pair could possibly continue the pull-back towards an important pivot near 103.00 mark. This 103.00 region may now possibly cap any near-term up-move for the pair. However, should the pair continue with its rebound and move back above 100-day SMA, important pivot near 103.00 mark, it could possibly continue strengthening towards an intermediate horizontal resistance near 104.00-20 zone.
- Following a test of the 100-day SMA resistance, this week the pair fell sharply, giving up all of its gains registered in the previous three weeks, and moved back below 0.8800 mark. The pair currently is hovering around a very important support near 0.8780-60 zone. Should the pair fail to hold this important support, it is likely to witness accelerated weakness initially towards testing over two-year low touched in March 2014 and further towards testing Sept. 2011 lows of 0.8660-50 zone, also coinciding with the lower trend-line support of a descending trend-channel formation on daily chart.
- Alternatively, should the pair now witness some rebound, it is likely to face immediate resistance near 0.8800 horizontal zone. This is closely followed by another horizontal resistance near 0.8860-0.8850 horizontal zone. However, the pair is likely to confront major resistance near 100-day SMA region, 0.8900-0.8920 zone. Should the pair now strengthen above 100-day SMA, it could possibly break past another strong resistance near 0.9050 level, comprising of 200-day SMA, also marking a break above the upper trend-line resistance of a descending trend-channel, which could further trigger sharp up-move for the pair in the near-term.
Senior Market Analyst
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