The EUR bulls were out in full force yesterday blowing through several resistance points before being stopped at the 1.1050 resistance zone. The pair has retraced to the 1.1000 round figure support zone, as markets take a breather and decide where to go next. Resistance is at 1.1050, 1.10717 and then 1.1100, bulls will look to break these levels as they continue to feed off of the ECBs less than expected dovish tone. If the bears maintain control at the 1.1000 zone, they will look to push back to 1.09798 and then to last week’s main resistance point (now support) at 1.0940.
The pair blew through major resistance levels yesterday after we note that GBP bulls were entering the market strongly around the 23.6% Fibonacci support zone. The pair is trading above a significant support zone of 1.5150, if this zone holds, bulls will ramp up price to the 1.27 and 1.68 (1.5226 and 1.5309 respectively) Fibonacci extension zones as they scale out ahead of the BOE meeting later today. If the current resistance holds, we will see bears push for the 1.5150, 1.5100 and 1.5060 support zones as they attempt to salvage some profits from yesterday hammering.
The pair continues to trade sideways near the 2004 highs as it looks for direction, support is a 1.35550, 1.5250 and 1.3500. While resistance is at 1.3570, 1.3605 and 1.3622. Both side will be looking for any data to help them drive price but until then we expect the range to persist as the tug of war continues.
The USDZAR continues to break new ground, hammering out new highs, day in day out. Currently the pair is taking a breather and it seems that bulls are looking to take profit off the table. A close below 14.98 will see a rush for the next support zones, 14.85 and 14.69, being tested. If the bulls manage to hold the current positions then we expect them to try for 15.07 and 15.125 respectively before exploring unseen territories.