Charts for Next Week – GBP/USD, Yen Cross-rates, Gold & Others

There aren’t a lot of immediate high conviction set-ups, but if a few things play out to plan that could quickly change. We focused on GBP/USD, JPY vs. several currencies, gold, as well as a few other key rates.

Technical Highlights:

• GBP/USD price holding trend-line support, building a wedge
• USD/JPY turned lower from resistance, JPY crosses also looking lower
• Gold caught between long-term trend resistance and short-term support

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GBP/USD price holding trend-line support, building a wedge

Getting a hold on GBP/USD has been difficult lately, but with a little more time that may change. It's currently attempting to hold on to the trend-line extending higher since the early part of last month. Yesterday’s reversal low at 13857 will need to maintain.

As long as it does, a move higher could bring a wedge formation into view with a clear top-side trend-line to work with. The convergence in price is likely to lead to a one-way move soon. Given the direction of the broader trend (up), a breakout to the top-side would be most ideal and likely lead to the cleanest move.

Should this happen, then GBP/USD will stay on course to possibly erasing the ‘Brexit’ downdraft at some point this year around the 14800-level.

GBP/USD Daily Chart

USD/JPY turned lower from resistance, JPY crosses also looking lower

USD/JPY turned down from the resistance zone we had penciled in earlier this week, and given the force yesterday at which it did so suggests that the bounce is over. We’ll use the 10790 high this week as our ‘line-in-the-sand’ for now.

Last week, USD/JPY closed firmly below the 2012 trend-line, suggesting that not only will the intermediate-term trend maintain, but that a fairly substantial decline could be in store. Looking to around 100 as of now.

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USD/JPY Daily Chart

GBP/JPY still has room to go before thoroughly testing support in the 148/147 range, but it will be a very important test. There are several points of confluence between horizontal support, trend-line, and the 200-day – all converging to make for a ‘make or break’ spot. It will be treated as support until broken, but if it does break then a material decline could be in store. (Also looked at EUR/JPY, CHF/JPY, and AUD/JPY; all looking lower).

GBP/JPY Daily Chart

Gold caught between long-term trend resistance and short-term support

Gold remains contained by the 2013 trend-line, a threshold it has crossed on a daily basis, but not on a weekly closing basis. Given the long-term nature of the line a weekly close is needed before clearing for higher prices. With that said, more pressure could be in store and even if it rallies from here it is at risk of finding more swaths of sellers.

The trend-line from December is keeping gold supported for now, but should it give-way then the area surrounding 1306 comes into view. Silver weakness seen as possibly taking it to 16.20, then sub-16.

Gold Daily Chart

Other market highlights...

We also took a look at EUR/USD, USD/CAD, AUD/USD, NZD/USD, USD/CHF, AUD/NZD, EUR/GBP, EUR/NZD, EUR/CAD, USD/ZAR, Crude oil, and the S&P 500. For full technical considerations, please check out the video above…

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---Written by Paul Robinson, Market Analyst

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