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Heading into next week it’s hard to find charts of high conviction, with unfavorable volatility in currencies keeping things choppy. The Euro may be ready in the short-term, though, to have some type of directional move as it moves near the apex of a triangle. USD/JPY likely to keep swinging around within an even larger triangle, may get some upside help near-term from stocks. Gold is at a decision point and ready to make some type of directional move in the next few days.

Technical Highlights:

  • EUR/USD triangle set to break very soon
  • USD/JPY building a broadening triangle
  • Gold has a decision to make at resistance

For a summary of what other traders are doing in key markets, check out the IG Client Sentiment page.

EUR/USD triangle set to break very soon

Things played out this week pretty much as expected in the Euro, with price action continuing to converge towards a breakout point. This won’t last much longer as the apex is right straight ahead. Today’s NFP figure may do the trick, or not. In any event, regardless of the catalyst, a breakout looks near.

A break higher will have the Euro running quickly into the teeth of resistance from the mid-11400s up to the mid-11500s, while a break lower will have the underside trend-line from last November in view again. Given the way EUR/USD has traded over the past few months a move in either direction may be truncated, with a move higher having the highest probability of failing with trend, tone, and resistance all working against the single-currency.

EUR/USD Daily Chart (Triangle to break very soon)

EUR/USD daily chart, triangle to break very soon

See what key fundamental and technical factors are expected to keep driving the Euro through year-end in the Euro Forecast.

USD/JPY building a broadening triangle

USD/JPY was recently working its way towards the apex of a triangle and is often-the-case with these patterns it is doing a little shape-shifting and broadening a bit. Which is fine, but if it is to eventually work towards a breakout then we may have to sit tight for a bit longer. A move higher will be needed next to fill out the triangle, and there could be some extra help in doing that if the reversal in the S&P 500 yesterday holds and furthers along to the top-side.

USD/JPY Daily Chart (Triangle pattern to continue building)

USD/JPY daily chart, triangle pattern to continue building

See what key fundamental and technical factors are expected to keep driving the Yen through year-end in the Yen Forecast.

Gold has a decision to make at resistance

Yesterday gold posted a smallish reversal bar at resistance and has been hanging out in this area for the past few days. It’s time for a decision. NFPs? Maybe. A sustained break into the 1240s will have the 200-day at 1256 up next and then the upper parallel of a developing longer-term bear-flag. Making good on the smallish daily reversal will have the rising lower parallel from August back in focus and the chop continuing.

See what key fundamental and technical factors are expected to keep driving Gold through year-end in the Gold Forecast.

Gold Daily Chart (At inflection point)

gold daily chart, at inflection point

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