FX.co ★ Daily analysis of major pairs for May 14, 2014

EUR/USD: The EUR/USD trended downwards yesterday, but the downward move has been challenged at the support line of 1.3700 (which is our initial target for this week). The price has bounced upwards from that support level, but the rally may be limited. The shallow rally that came about early this week resulted in a serious southward move – the current upward bounce may also be an example of such rally. The rally may be contained at the resistance level of 1.3750.

USD/CHF: This pair moved upward yesterday. But the upward movement was contained at the resistance level of 0.8900. A shallow pullback has followed the containment – which is not expected to go below the support level at 0.8850. Eventually, the price should break the aforementioned resistance level to the upside so that the upward trend could continue.

GBP/USD:  This is a bear market in spite of the shallow movement on it. It is expected that the price could fall further downwards from here, unless it crosses the distribution territory at 1.6900 to the upside.

USD/JPY:  It is assumed that this pair may go further upwards after the current correction has panned out. The price above the EMA 56 and the RSI period 14 is above the level 50.  

EUR/JPY:  This is a bear market, but it is clear that it needs to break the demand zone at 140.00 to the downside before the bearish trend could continue. This is the zone at which the bearish move was rejected last week, so it must be broken down for the bears to continue claiming victory.