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Technical Weekly: GBP/USD Making an 8 Year Low?

Technical Weekly: GBP/USD Making an 8 Year Low?

2017-01-20 21:40:00
Jamie Saettele, CMT, Sr. Technical Strategist
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EUR/USD

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

“I don’t see how it’s smooth sailing to the downside…EUR/USD continues to trade on a long term parallel and the weekly wicks (key reversal this week) denote active support. I don’t like being a bear in the face of active support at a well-defined parallel.” Support held and the first test for this rally is 1.0820 (former lows and a parallel) and then 1.0912 (Brexit low) and 31 year trendline. Pay attention to weekly RSI. The fact that the indicator has turned up from above 30 is a positive but pay attention to the 60 value for resistance.

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GBP/USD

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

Did the 96 month (8 year) cycle low count just nail a major GBP/USD low (cycle is in February but give this some wiggle room)? This week’s bullish outside week is a good start. Still, Cable is testing an important level in the form of the 13 week average, which tends to provide support/resistance during trends. Price is still below and a push above would be viewed as a positive, especially in light of the mentioned bullish week. The former floor in the 1.3500-1.3700 zone could come into play at some point although the first test would be 1.2800.

AUD/USD

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

I’m viewing Aussie strength YTD as a harbinger of things to come. There will be 2 way action of course and the .7700 area could influence for a pause. Prior comments remain valid. “AUD/USD sports good looking symmetry with respect to the time between major lows. It’s one reason that I like the idea of the 2016 low at .6847 holding. The other reason to get bullish in the event of constructive price action on the daily or weekly charts is the relationship between the 2011 high and 2016 low. The .618 absolute retracement of the 2011 high at 1.1080 is .6847 (1.1080 x .618). The 2016 low is .6827.”

NZD/USD

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

“The re-test, head and shoulders, and rally from 2015 as a wedge is so textbook it scares me.” It was right to be scared! At this point, the head and shoulders pattern is considered failed but pay attention to the underside of the 2016 trendline for resistance. The line is just above the December high of .7239.

USD/JPY

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

The last USD/JPY note remarked that “USD/JPY may be at or near the end of the first leg of the next bull cycle just as October 1990 was the first leg of the next bear cycle.” USD/JPY has indeed turned lower but could stabilize now that the 13 week average has held. Even so, the strength of the prior trend probably necessitates a more drawn out corrective process. In the event of a break, 109 would be in play.

USD/CAD

Weekly

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

USD/CAD made a mess of the May-August trendline and triggered a bear trap in the process. Connect the May and November highs and extend a parallel off of the May low to work with the new channel. The overlapping (corrective) nature of the advance from May keeps me from turning bullish on the outside week. Best to wait for clarity regarding Loonie.

USD/CHF

Weekly (LOG)

Technical Weekly: GBP/USD Making an 8 Year Low?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

Since trading to a 6+ year high, USD/CHF has slowly declined. Broad upside potential is possible as long as price is above the 2011-2014 trendline. The trendline is near .9850 on log scale and just above .9700 on arithmetic. The topside of the wedge is worth knowing near 1.0450 (line off of 2012 and 2015 highs). Essentially, the wedge barriers are all I care about…all else is noise.

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