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Constructive Copper Pattern adds to AUD/USD Intrigue

Constructive Copper Pattern adds to AUD/USD Intrigue

2016-02-19 18:50:00
Jamie Saettele, CMT, Sr. Technical Strategist
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EUR/USD

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Recent FXTW updates noted that “the declines into March and December 2015 found support just below the line that extends off of the 1985 and 2000 lows (a parallel from the March low was close to the December low). November and December trade produced a tweezer bottom (reversal candlestick pattern…bullish in this case) as well. The move through the 55 week average is important because the widely watched average was precise resistance in August and October 2015. Weekly RSI, which stalled just above 50 on the 2015 rally attempts, is attempting its own ‘breakout’ attempt. 1.1050/60 (March and December 2015 highs) is viewed as pivotal to the integrity of the bullish interpretation.” EUR/USD followed through on the breakout and has pulled back to the breakout zone (support). If EUR/USD is headed higher, then it needs to do so from here.

-For forecasts and 2016 opportunities, check out the DailyFX Trading Guides.

GBP/USD

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-As noted previously, “RSI divergence on the weekly is intriguing but daily momentum at the low is more typical of a 3rd wave. So, it’s still wise to treat strength in a corrective manner.” 2015 lows has thus far capped the bounce from the rally. In other words, former support is providing resistance. This dynamic is bearish but a period of sideways trade may be in store for a while to correct recent momentum extremes.

AUD/USD

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-There is no change to recent comments. “Corrective (range bound) trading behavior may very well continue given the weekly tweezer bottom (at the long term median line no less). Divergence with RSI on the weekly serves as a bullish reversal warning too.” FXTW adds that resistance may reside in the mid .7400s.

NZD/USD

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-NZD/USD strength continues to fail just shy of the long term median line, which is in line with horizontal resistance from last July. Bearish wicks on recent weekly candles don’t bode well for the Bird either. As noted previously, “The red lines on the chart indicate a long term RSI trend sell signal (higher RSI and lower price). The October high remains critical to any bearish interpretation.”

USD/JPY

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Despite BoJ efforts, FXTW maintained recently that “a broader topping formation is still possible.” The main reason for the stand was the fact that “the 2015 high was right at the 1990-1998 line (log scale)”. USD/JPY has completed a head and shoulders pattern and the objective is mid-105.00s. There is a lot at 105, including the top side of the 2002-2007 line, the January 2014 high, and October 2014 low. Trading levels to be aware of include 110.00s (October 2014 high) and 115.50s-116.20s (breakdown level).

USD/CAD

Monthly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-The most recent update from FXTW noted that “the 1976-1991 line, which was resistance (not precise however), could end up as support again on the next ‘correction’. That line is around 1.3600. If USD/CAD is going to ‘correct’, which might it correct from? At this point, I’d watch the 78.6% retracement of the decline from the 2002-2007 decline. The Fib is 1.4659.” USD/CAD topped at 1.4689 in January and just found support near the parallel of the mentioned long term line. With 2 important barriers on either side of price, a period of sideways trade may be in store.

USD/CHF

Weekly

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Some extremely long term technical considerations are worthy of note when looking at USD/CHF. Read about them here. Levels for possible support on this decline are .9595 (trendline and January 2012 high) and just below .9400 (trendline and 200 week average).

Bonus Chart

Copper Weekly Nearest Future

Constructive Copper Pattern adds to AUD/USD Intrigue

Chart Prepared by Jamie Saettele, CMT

-Trend lows for copper were made back in mid-January at a long term trendline (line that extends off of the October 2002 and 2008 lows). A view of the daily reveals a possible inverse head and shoulders pattern as well. The pattern would complete on a rally above 2.14 and yield a target of 2.3435. Incidentally, this level is near a median line that was resistance back in September (55 week and 200 day averages are up there too). Bottom line, copper looks the most constructive that it has in years. From an FX perspective, this could be tailwind for AUD/USD.

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