Charts for Next Week:
- EUR/USD looking at continuing a renewed leg of weakness
- AUD/USD 7000 level is a big line-in-the-sand to watch
- Gold price looks headed lower with USD stronger
EUR/USD was holding up ok not long ago after breaking down in September, but the recent channel was snapped, and with it another wave of selling looks to be underway.A breakdown below 11612, a lower low from last month, will have in play the support zone from just under 11500 to around 11375. The 200-day is rising up not too far below there, currently at 11313. Also a possible form of support on further weakness could be the lower parallel tied to the trend-line of the August high; this line clocks in around the 11500-mark, or the March spike-high. While a big down-move may not develop, it does appear we will see more selling in the sessions ahead to at least the aforementioned levels. To flip the script towards a long bias we will need to see some work done before gaining any clarity and conviction.
EUR/USD Daily Chart (looking headed for a lower to into prior levels)
AUD/USD is sitting on a big level here right around 7000. It began as a level on December 31, then became resistance again in June, followed by support twice in the past month. With price sitting on the level now it appears it could be ready to break, but before running with an aggressive short bias the level needs to actually break. Re-enforcing a bearish bias is the descending wedge that is forming in recent weeks, marked by lower highs and the aforementioned floor. A breakdown should at least lead to a move to the 200-day at 6800. We still can’t rule an upside wedge breakout, but for this to happen we will need to see AUD/USD hold here and run above the top-side trend-line of the wedge.
AUD/USD Daily Chart (7000 is a big level, wedge forming)
Gold continues to look vulnerable with its technical posturing looking weak and the dollar turning higher. This week it broke down out of a small upward channel within the confines of an intermediate-term downward channel. Next up as support is the September low at 1848, and if that is broken then look for some old levels from 2011/12 to potentially act as support. This was the inflection point (~1800) where the most meteoric portion of the rise of the rally off the March low took shape back in July. To turn the picture bullish, gold will need to rise above the top-side parallel of the downward channel and above 1933 to confirm with a higher high from earlier this month.
Gold Daily Chart (looks headed for a new low)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
