Charts for Next Week – Euro, GBP-crosses, Gold, Dow & More
The euro continues to be confined, but will eventually break one-way or another. Several GBP-crosses are presenting set-ups of intrigue (GBP/NZD, GBP/AUD & EUR/GBP). Gold continues its struggles around the 2013 trend-line/top of range. Will the Dow turn down to complete its descending wedge?
- EUR/USD range persists, breakout likely growing closer
- GBP/NZD, GBP/AUD & EUR/GBP set-ups of interest
- Gold trading around key area of resistance
- Dow needs to turn down to keep descending wedge in play
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EUR/USD range persists, breakout likely growing closer
As we’ve been discussing, EUR/USD continues to be a difficult proposition within the ongoing range, limiting opportunities to fades off notable top and bottom-side levels. There is good support not far below at the April 2017 trend-line, May 2016 slope, and the recent swing-low. This keeps a slightly upward bias intact.
On the top-side the 2008 trend-line is eyed as the next objective for resistance. Generally, it appears we will see a breakout to the top-side, but until we get a confirmed break we must respect the choppy trading environment. Ranges don’t last forever and given how long this one has persisted, there is optimism that it will break sooner rather than later.
EUR/USD Daily Chart (Range confinement)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for EUR
GBP/NZD, GBP/AUD & EUR/GBP set-ups of interest
GBP/NZD turned higher yesterday from a trend-line we’ve been watching. In addition to the trend-line there is a downward channel, which if broken should lead to a move higher. For more details on the set-up, check out the GBP/NZD trade idea published earlier this morning.
GBP/NZD Daily Chart (Bullish set-up)
GBP/AUD is consolidating nicely after a strong run in March, with the congestion turning into a triangle pattern. Overall, whether a well-formed triangle develops or not, the cross is setting up for a move higher at some point soon.
GBP/AUD Daily Chart (Consolidating, possible triangle)
EUR/GBP could finally be on the verge of picking up sustainable momentum with it trading below all support at the moment. A poor close today would have the weekly chart decidedly below support as well on a closing basis. Given the generally choppy nature of the cross, looking to short stalling rallies on its way lower is the preferred approach. Looking lower, there isn’t any major daily support until down towards 8300.
EUR/GBP Daily Chart (Breaking Support)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for GBP
Gold trading around key area of resistance
As is the case with the dollar, gold continues to remain range-bound. There is strong resistance around the 2013 trend-line up to 1366. There could be yet another rejection on a weekly basis, casting doubt on the recent rise. It would seem gold is poised to eventually break out to the top-side, but until it does we will continue to honor bottom and top-side levels.
Gold Daily Chart (2013 trend-line/range)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for Gold
Dow needs to turn down to keep descending wedge in play
The descending wedge is still in play for the Dow, but it will need to turn down very shortly if this is to remain the case. The broad pattern suggests if it does continue to develop, that we’ll see another big drop. However, if the Dow breaks the trend-line off the highs, the pattern will be busted and upside follow-through is likely.
Those trading risk-sensitive pairs (i.e. – Yen), should take note even if not trading indices, as the risk-on/off theme has an impact on their direction.
Dow Daily Chart (Descending wedge)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for Global Equity Indices
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---Written by Paul Robinson, Market Analyst
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