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Trading Outlook – EUR/USD, USD/JPY, Yen Crosses, Gold Price & More

Trading Outlook – EUR/USD, USD/JPY, Yen Crosses, Gold Price & More

Paul Robinson, Strategist

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

For longer-term trading ideas, forecasts (Q3 to be released in days ahead), and a library of educational content, check out the DailyFX Trading Guides.

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)

EUR/USD daily chart, getting bottled up for an eventual breakout...

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)

USD/JPY 4-hr chart, rounding price action

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)

GBP/JPY 4-hr chart with wedge building

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)

Gold daily chart, approaching big support zone

Resources for Forex & CFD Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.