EUR/USD is slowly boxing itself in between a couple of important thresholds, which could soon lead to another move (looking like lower at this time). USD/JPY is starting to hold some appeal from the short-side while Yen-crosses as well look vulnerable. Gold is quickly approaching our targeted support zone.
Technical Highlights:
- EUR/USD boxing itself in, patiently waiting for a break
- USD/JPY tough, but rolling over; Yen crosses look vulnerable
- Gold continues to move towards targeted support zone
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EUR/USD boxing itself in, patiently waiting for a break
The turn down yesterday in the euro has the trend-line from April firmed up as resistance, also having potential to cap a lower-high from the ECB-day on the 14th. Just below lies big long-term support in the form of highs during 2015/16 and the trend-line running up off the January 2017 low.
The colliding support and resistance and weakening price action has a descending wedge coming into the making. It will take a little more time to fully develop, but soon bottled up price action could lead to another extended move. The thinking on this end, is that a downside resolution is in store, but we’ll first need to see support break around 11500 before conviction can grow.
EUR/USD Daily Chart (Congestion to lead to breakout, eventually)
USD/JPY tough, but rolling over; Yen crosses look vulnerable
Lately, USD/JPY hasn’t been the best spot to be for traders, but that could soon change if the rounded price action (most visible on the 4-hr) turns out to be a weakening topping sequence. To confirm this scenario, a break below 10936 will be needed. If this unfolds look for the recently choppy price action to smooth out into one-way trade.
See the IG Client Sentiment page for how sentiment changes can help you better gauge market direction.
USD/JPY 4-hr Chart (Rolling over)
GBP/JPY is one of the preferred crosses among the ‘Yen-plex’, with its generally bearish-leaning daily chart and 4-hr price sequence. On the 4-hr chart we can see price action weakening a bit with a relatively flat bottom and developing lower-highs. The descending nature of the pattern suggests lower prices are around the bend. A break of the underside trend-line should have the 14300-area in play relatively soon if the trade is to work out.
Other Yen crosses we looked at included EUR/JPY, AUD/JPY, and NZD/JPY…
GBP/JPY 4-hr Chart (Wedge)
Gold continues to move towards targeted support zone
Gold continues to work its way lower, with targeted support down in the low-1240s/1236 area coming into focus. There is a lower parallel not far below current levels, but the December 2015 trend-line and December low are the primary focus as support. Not a bull down there, but things could get interesting. It would be a spot for those holding shorts from good prices to be on the watch-out for as buyers may show up in earnest.
Gold Daily Chart (Approaching big support zone)
Resources for Forex & CFD Traders
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
