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The past few days have quickly brought into focus 11500 support in EUR/USD, which could be at the least tested if not broken in the week ahead. AUD/USD is closing in on its own significant support, around the 7300-line is big as the digestion phase over the past few weeks could be finally nearing an end.

Keep an eye on EUR/AUD and EUR/NZD as price action winds up towards a breakout. Gold is declining into a fairly significant support zone, including the psych-level of 1200; will it hold? We’ll have to see where we are at the end of the day/week with NFPs, but shouldn’t impact the charts too much.

Technical Highlights:

  • EUR/USD and AUD/USD nearing big support
  • EUR/AUD & EUR/NZD winding up for moves
  • Gold declining into support levels, can they hold?

To check out our intermediate-term fundamental and technical outlook on major markets and currencies, see the DailyFX Q3 Forecasts.

EUR/USD and AUD/USD nearing big support

The euro continues to weaken, now having broke down from the symmetrical triangle we’ve been recently focusing on. But the bigger development is the 11500-line. It’ a big one. A break below will almost certainly garner more selling, while a hold will keep the euro alive to fight another day. A hold and bounce could lead to a descending wedge, a scenario we’ll address later should it become relevant. For now, it looks like 11500 could be in for a test next week.

EUR/USD Daily Chart (11500 big)

EUR/USD daily chart, 11500 big

Check out the Q3 Euro Forecast for a broader fundamental and technical view

AUD/USD is closing in on breaking down below 7310, the lowest point of the month+ long digestion phase. But be mindful that support is support until broken. A breakdown, however, could quickly bring into play 7175/45, where a pair of sizable swing lows from 2016 lie.

AUD/USD Daily Chart (7310 important)

AUD/USD daily chart, 7310 important

EUR/AUD & EUR/NZD winding up for moves

Turning to Euro-crosses, two stand out as potential movers. The first, EUR/AUD, has been stuck in one of the narrowest multi-week ranges in its history. Something has to give, it might not be next week, but those looking for a pair on the verge of seeing higher volatility, this is an excellent candidate. Which way will the range break? Don’t know, we’ll just run with whatever direction congestion decides to resolve itself.

EUR/AUD Daily Chart (Range-break nearing)

EUR/AUD daily chart, range-break nearing

EUR/NZD isn’t as tantalizing of a breakout prospect as its sibling pair, but price is quickly drawing towards the apex of the descending wedge. Like EUR/AUD, we’ll run with the break accordingly. It could be a continuation pattern of the rally proceeding its construction, but the descending nature of the wedge may be indicating weakening price action on the verge of a breakdown.

EUR/NZD Daily Chart (Descending wedge nearing breakout)

EUR/NZD daily chart, descending wedge nearing breakout

Gold declining into support levels, can they hold?

Gold is probing noteworthy support levels from the 1205 down to the 1195 area, with the psych level of 1200 stuck right in the middle of this zone. Dollar strength looks set to persist and even if it doesn’t and it treads water, pressure will be on gold longs. The decline from over 1300 has seen bounces along the way become shorter and shorter in duration indicating the trend may be nearing full maturity for now, so a recovery bounce may soon be in store. However, there is no interest on this end in taking a countertrend trade until we see a sharp turnaround in momentum.

Check out the Q3 Gold Forecast for a broader fundamental and technical view

Gold Daily Chart (Support zone in play)

Gold daily chart, support zone in play

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