FX.co ★ Daily trading forecasts for May 21, 2013

EUR/USD: In spite of the negative news coming from the eurozone, this pair has bounced off the support line at 1.2800. However, the bearish bias is still here: the bounce upwards may proffer an opportunity to sell more expensively. For the current bearish outlook not to be invalid, the price ought not go above the resistance line at 1.2950.

USD/CHF: The USD/CHF traded lower on Monday, but the bullish scenario is still a sensible idea. For the bearish scenario to continue to make sense, the price should not go below the support level at 0.9600. It is assumed that there could be a new lease of a bullish wave from the current market level.

GBP/USD: On Monday, the GBP/USD pair moved upwards by more than 100 pips – which is a serious threat to the current bearish outlook. The threat is serious to the extent that the RSI period 14 has gone above the 50 level. Good news for the bears: the bearish trend is valid as long as the price is below the distribution territory of 1.5300.

USD/JPY: This instrument moved in a mean reversion mode (countertrend pattern) on Monday, following a small gap that occured at the beginning of this week. Nevertheless, the bullish scenario is valid as long as the price is above the EMA 56, irrespective of whether the RSI is below the 50 level or not.

EUR/JPY: The cross consolidated lower on Monday, unlike its USD/JPY counterpart, which came down vividly. The RSI period 50 is showing indecision, but the EMAs are still in support of the northward outlook. Whatever happens today would eventually determine the ultimate bias for this week.