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Dow Jones: Dueling Formations
I started off with a look at US equities as this week brought some interesting observations. In the Dow Jones Industrial Average, the 2019 bullish trend finally started to face a bit of turbulence when re-engaging with prior November/December swing highs. On a longer-term look, this week’s pullback has seen prices flow through the bottom of a rising wedge formation, which will often be approached in a bearish fashion.
DJIA: Dow Jones Four-Hour Price Chart
Chart prepared by James Stanley
On a shorter-term basis, this week’s pullback has conformed to a fairly consistent bearish channel. That channel, when taken with the prior bullish trend, makes for a bull flag formation – which would point to additional upside.
DJIA: Dow Jones Hourly Price Chart
Chart prepared by James Stanley
S&P Range Holds Key Fibonacci Support
The S&P 500 has been more range-bound this week than what was looked at above in the Dow. This can keep the door open for range strategies, and for traders that do want to assign bullish continuation strategies to US stocks, that range can be treated with a prior trend-side bias, looking to get long around support without getting short upon re-visits to resistance.
S&P 500 Hourly Price Chart
Chart prepared by James Stanley
Gold: Getting it’s Metal Tested
Gold prices have finally started to pullback after the profuse breakout. The big question at this point is whether buyers show-up to again offer support around $1302. This can be extended up to $1310.53 to mark a support zone of interest. A bit-lower is a subordinated zone of interest that runs from around $1275 up to $1286.
Gold Four-Hour Price Chart
Chart prepared by James Stanley
US Dollar Bounces on US GDP, is the Pullback Complete?
This morning saw the US Dollar sink down to a fresh three-week-low. But that move promptly reversed on the back of a better-than-expected US GDP report from Q4, as discussed earlier by my colleague Nick Cawley.
Prices soon bounced-up to test resistance at prior support of 96.27-96.30; and that zone has thus far held the highs. But buyers haven’t yet given up, as indicated by a hold of support on the prior bearish trend-line. This can keep the door open for a re-visit to 96.27-96.30, and if that zone is taken-out, the prior support area around 96.47-96.53 becomes interesting for deeper resistance.
US Dollar Hourly Price Chart
Chart prepared by James Stanley
EUR/USD Threatens Wedge Break Ahead of Resistance Test
There are two formations of interest in EURUSD at the moment. The longer-term formation is the range that’s now been in-play for more than three months. I started looking at topside setups off of this formation a couple of weeks ago.
EURUSD Eight-Hour Price Chart
Chart prepared by James Stanley
On a shorter-term basis, the pair has built into a rising wedge pattern over the past few weeks, which will often be approached with bearish reversal potential. The topside of that wedge formation was tested earlier this morning, ahead of the US GDP release. But after that print, as USD-strength showed back-up, EURUSD began to test the bottom side of the formation. I went over a short-term outlook for the pair should the 1.1360 level get taken-out, at which point the 1.1330 area becomes of interest for longer-term higher-low support potential.
EURUSD Hourly Price Chart
Chart prepared by James Stanley
GBPUSD: Cable Breakout Stalls – Where Now?
This week brought a big move in the British Pound as a diminishing prospect of Hard-Brexit created some severe short-cover in GBP. This equated to a sharp bullish move in the pair as GBPUSD inclined to as high as 1.3350. The move has since stalled, and as I shared in the webinar, this theme could have bullish continuation potential given the nature of the driver. I had looked at strategy in the pair in yesterday’s technical article entitled, GBPUSD: Cable Rally Goes Overbought on Run to Seven-Month Highs.
GBPUSD Hourly Price Chart
Chart prepared by James Stanley
USDJPY Fresh 2019 Highs
USDJPY put in another topside breakout today, running to a fresh 2019 high in the pair. Prices are currently resisting at the prior swing-high from December 26th. The pair remains as one of the more attractive long-USD candidates, especially given the way that the pair held support this week despite the US Dollar’s sell-off. For forward-looking strategies, aggressive support instances can be sought out at prior resistance from 111.13-111.23 while longer-term strategies can focus-in on a support test of the Fibonacci level at 110.86.
USDJPY Four-Hour Price Chart
Chart prepared by James Stanley
USDCAD: Building Case for a Bullish Reversal?
For this one, I first took a look at WTI Oil prices, which are closing in on a key area of support that I’ll show a little later. In USDCAD, with resistance in Oil nearing, there could be an interesting case for CAD-weakness. Also of interest is a recent build of higher-lows, combined with an area of key support just below current prices around the 1.3132 Fibonacci level.
USDCAD Four-Hour Price Chart
Chart prepared by James Stanley
WTI: US Oil Closing in on Key Resistance
It’s been a strong year for Oil prices and the crude recovery has largely continued throughout most of this year. Last week finally brought some element of resistance, as taken from the 38.2% Fibonacci retracement of the 2016-2018 major move. That level at 57.47 helped to hold the highs through four days of tests last week. But, as looked at on Tuesday, $55 support re-opened the door to a re-test of this resistance. Now that this price is nearing, it could be a difficult time to look at bullish Oil exposure.
WTI Crude Oil Eight-Hour Price Chart
Chart prepared by James Stanley
AUDUSD Range Potential
On Tuesday I had looked at resistance in AUDUSD, and that’s thus far held as prices have dipped back-below the .7150-level. The big question at this point is whether support remains after another test of the .7075 level.
AUDUSD Four-Hour Price Chart
Chart prepared by James Stanley
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q4 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.
Forex Trading Resources
DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.
If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
