The dollar spectrum is a bit of a mix here at this time, with few clean set-ups to speak of. The euro is neither here nor there, but has levels to the top and bottom-side to reference. To the contrary, USD/JPY looks poised to make an explosive move soon (CHF/JPY too). The DAX broke down from a bearish rising wedge today, it’s poised to trade lower in the near-term. Watching or signs of a higher low to form in gold.

Technical Highlights:

  • EUR/USD has strong support, but lacking upside conviction
  • USD/JPY ready to make a move (CHF/JPY too)
  • Gold price decline has higher low scenario in play
  • DAX broke bearish rising wedge, more weakness expected

We just released fresh quarterly forecasts, to see our fundamental and technical insights on major markets and currencies, check out the DailyFX Q3 Forecasts.

EUR/USD has strong support, but lacking upside conviction

The euro found strong support in the 11500s and has since seen a bit of a rebound, but momentum and the broader trend aren’t bringing to the table with it much conviction. On the top-side there are the 11800s to contend with (11790 touched on Monday), which could turn EUR/USD back lower if it hasn’t already seen its best levels.

If Monday’s high holds, a descending wedge could form with 11500 as major flat bottom support to the pattern. It’s only a scenario now, but with a little more time it could present an intriguing set-up. For now, from where we sit the euro is ‘neither here nor there’.

EUR/USD Daily Chart (between levels, potential wedge)

EUR/USD daily chart, between levels/potential for a wedge

For more in-depth fundamental and technical analysis, check out the Q3 Forecast for the Euro

USD/JPY ready to make a move (CHF/JPY too)

USD/JPY is right at the tip of a tightening ascending wedge, implicating it is very near making a sizable breakout. Standing right at the end of the pattern is a well-defined (clean connecting points) trend-line extending down from 2015.

The pattern implies a breakout to the upside with the higher lowers, but we can’t rule out a turn lower in line with trend resistance. Preferably, if USD/JPY is to break to the top-side, given the duration of the trend-line, it confirms with a weekly close above. (We’ll be taking another close look at this in Friday’s “Charts for Next Week” webinar…)

USD/JPY Daily Chart (Ascending wedge, 3-yr trend-line)

USD/JPY daily chart, ascending wedge at 3-yr trend-line

CHF/JPY is up against pretty stiff resistance at this time, but very near breaking out of an ascending wedge. The price structure since March even has an inverse head-and-shoulders look to it as well. In either case – wedge or H&S – a break above resistance in the 11200s should have the yen cross running, while a breakdown below rising support could spell trouble.

CHF/JPY Daily Chart (Wedge/H&S, nearing a breakout)

CHF/JPY daily chart, wedge building (possible inverse H&S), breakout nearing

For more in-depth fundamental and technical analysis, check out the Q3 Forecast for the Japanese Yen

Gold price decline has higher low scenario in play

This has been one of the focal themes this week – a higher low forming before at least one more push higher. The low needs to form soon, preferably at or above the 2015 trend-line, for this to hold any real weight. Should buyers step up soon, looking for a further recovery towards the upper parallel of the channel dating back to April.

Gold Daily Chart (Higher low to form?)

Gold daily chart, higher low to form soon?

For more in-depth fundamental and technical analysis, check out the Q3 Forecast for Gold

DAX broke bearish rising wedge, more weakness expected

In yesterday’s webinar, we discussed the rising wedge scenario for the DAX and three ways in which it could unfold. The first option, simply break the underside trend-line and start to sell-off is the one which is in the works. (To see the other two, check out yesterday’s webinar archive.) With the break in place, the target is set on a test of the February 2016 trend-line down around 12200.

DAX Hourly Chart (Rising wedge confirmed)

DAX hourly chart, rising wedge conformed, should see lower prices from here

For more in-depth fundamental and technical analysis, check out the Q3 Forecast for Global Equity Indices

Resources for Index & Commodity 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