Looking ahead to next week, there is reason to believe we could be in for more weakness in JPY pairs as yen strength picks up momentum. Aussie is a set-up we’ve been tracking to the downside and with the broader pattern triggered the trading is bias is from the short-side. Gold was firmly rejected on an attempt to break resistance, it’s working closer to a sustained breakout.
Technical Highlights:
- USD/JPY at resistance on daily, 4-hr technical pattern
- Yen cross-rates on verge of picking up more downside momentum
- AUD/USD bear-flag broken, trading bias is lower
- Gold rejected lower, still winding up for a move soon
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USD/JPY at resistance on daily, 4-hr technical pattern
USD/JPY is currently trading at a confluence of trend-line and price zone resistance on the daily time-frame. Pulling in closer, on the 4-hr chart, there is a rising wedge forming which suggests a breakout is coming soon. A break to the downside will have a rejection from resistance confirmed and likely have USD/JPY rolling downhill. A breakout above ~11180 is needed to clear all resistance.
USD/JPY Daily Chart (Resistance)
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USD/JPY 4-hr Chart (Rising Wedge)
Yen cross-rates on verge of picking up more downside momentum
Yen cross-rates were swiftly hit last week, and barring any significant rallies between the time of this writing and the end of today’s session, there will be key-reversal bars on the weekly time-frame in the direction of the trend across the group.
A couple that we looked at were EUR/JPY and AUD/JPY. The former not only is about to post its second weekly reversal (with this week’s the most important), but also made a slight lower-low from last week. The trading bias is to the downside with rallies seen as likely to fail.
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EUR/JPY Weekly Chart (Reversing with trend)
EUR/JPY Daily Chart (Momentum lower, rallies vulnerable)
AUD/JPY posted (again, assuming no major turnarounds) its second key-reversal in a row on the weekly chart; follow-through looks to be in store for next week. There is room to go before the low-end of the range dating back to March is met. Like EUR/JPY, a lower low on the daily was also carved out from last week.
AUD/JPY Weekly Chart (Reversal Bars in direction of trend)
AUD/JPY Daily Chart (Room to go before support)
AUD/USD bear-flag broken, trading bias is lower
This is a set-up we’ve been tracking as of recent, with AUD/USD having now broken the underside trend-line off the bear-flag, we’re looking for further weakness from here. The approach on this end is to look for a bounce first, then join in short with a targeted objective of around 7330, or the May 2017 low.
AUD/USD Daily Chart (Bear-flag triggered)
Gold rejected, still winding up for a move soon
Gold tried to break back inside the multi-month range, but was swiftly rejected with the dollar surging post-ECB. This still maintains the coiling price action on the daily between the bottom of the range and the December 2016 trend-line; looking for one side to give-way very soon.
Gold Daily Chart (Rejection, breakout likely soon)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
