EURUSD (1.118): EURUSD is looking to retrace the declines over the past week after forming a bullish engulfing pattern on the daily chart yesterday (28/03). Price action remains below the resistance level of 1.13 – 1.123, so the immediate upside remains capped near 1.123. A break above 1.123 could see a potential rally back to the 1.130 level of previous resistance. But overall, the upside remains limited, unless there is a convincing break above the 1.130 resistance high, in which case, EURUSD could see further gains to 1.148. To the downside, 1.110 support will be tested, a break below could see a move to 1.10.
EURUSD upside limited to 1.13 while 1.110 support likely to be tested
USDJPY (113.61): USDJPY continues its strong and gradual move to the upside, but prices are reaching the resistance level near 114.056 – 114.877. The daily Stochastics continues to point to the hidden bearish divergence towards the support near 112.5 – 112.0. Establishing support here could see a potential base being formed, in which case prices could eventually move higher. There is also a possibility of an inverse head and shoulders pattern being formed with the neckline resistance near 114.0 – 114.50 levels. A test to this level and a dip to 112.5 – 112.0 would form the right shoulder. If this pattern unfolds as expected, a break above 114.5 could see USDJPY rally towards 117 resistance for a much-needed retest.
Watch for a potential inverse head and shoulders near 112.5/112 for 117
