GBPJPY Uptrend to Dominate; AUDUSD to Slide in the Short-Term
AUDUSD Short-Term Reversal | Inverse Head and Shoulders Pattern
AUDUSD could be in for a climb, as a short-term reversal pattern can be seen on its 1-hour forex chart. Price appears to be creating an inverse head and shoulders formation, with the neckline around the .7850 minor psychological resistance
A break above the neckline could mean a rally for the pair, with price ready to make around 100 pips in gains, which is around the same height as the chart pattern. However, if .7850 continues to hold as resistance, price could test its recent lows around the .7750 minor psychological support.
The path of least resistance is to the downside, as the upcoming US jobs release could renew demand for the currency. After all, the US economy has consistently printed better than expected data in the past few months and this strong momentum is likely to be sustained.
Meanwhile, analysts continue to predict another RBA rate cut in the next policy meetings, as the central bank decided to sit tight in their decision this week but retained their downbeat outlook. This could keep the Aussie’s gains in check and lead to a prolonged selloff for AUDUSD in case the US NFP reading posts impressive results once more.
GBPJPY Rising Channel | Support at 183.00
GBPJPY has been moving inside a rising channel on its 1-hour time frame and is on track to test the bottom of the range around the 183.00 support level. A bounce off this area could lead to another rally back to the top near the 185.50-186.00 psychological resistance levels.
Stochastic has already reached the oversold area and is starting to move higher, indicating a potential pickup in buying pressure. UK fundamentals are stronger than that of Japan, indicating that the current uptrend could stay intact.
Event risks for this setup today include the release of the UK services PMI, which might have the strongest effect on pound movement compared to the other industry PMI readings. The report could show an improvement for February, which would mean an increased contribution to overall economic growth.
Data from Japan has recently come in weaker than expected, with inflation and spending continuing to show weakness. This might be enough for the BOJ to adopt a more dovish stance, as additional stimulus might be needed to keep the economy afloat. However, the Japanese yen is currently enjoying support from the downturn in risk appetite.
Short-Term Pullback on Ebay Shares | Retest of Broken Resistance
Ebay shares recently showed increase buying momentum, as price broke above the long-term resistance at $57/share. Share prices have come close to testing the $60/share psychological resistance level before pulling back, possibly to retest the broken support zone.
Increased optimism for the US economy has led to gains for most US equities, including Ebay stock. Although Fed Chairperson Janet Yellen said that the Fed is in no rush to hike interest rates, other policymakers have indicated that the central bank is starting to considering tightening moves.
The upcoming non-farm payrolls release could be crucial in determining whether or not the Fed can take on a more hawkish bias, as another month of strong jobs gains might be enough reason for the FOMC to move closer to a rate hike. Apart from that, higher hiring could mean more consumer spending, which could translate to higher revenues for Ebay.
The short-term 50 SMA is moving above the longer-term 200 SMA on its daily chart, confirming that more gains are possible for Ebay shares. MACD is also moving up, although the indicator is almost in the overbought zone already. RSI is starting to move down, which means that a pullback is in play.