The US Dollar is trying to maintain support against several currencies. In today’s session we took a look at GBP/USD as it tries to maintain a bid up against strong confluent resistance. AUD/USD appears set up to turn down and test significant support again here soon. USD/JPY has bottoming pattern potential and will look to take another step this week in confirming a bullish scenario, but there are still some obstacles not too far higher to watch.
Technical Highlights:
- GBP/USD up against confluent resistance
- AUD/USD turning down from resistance
- USD/JPY trying to confirm H&S formation
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GBP/USD up against confluent resistance
GBP/USD is trading up against a strong area made up of three differing angles of resistance. The trend-line from the April 2018 high is in confluence with the 200-day MA and to a lesser degree of resistance there is an upper parallel tied to the September low.
This makes for a ripe spot to look for Cable to turn down, even if only temporarily to work off the two-day shot higher last week. On weakness, watch how price reacts to the October 2016 trend-line that acted as a ceiling in September. We could see a battle between levels before either a resolution in-line with the longer-term down-trend, or see buyers push GBPUSD above resistance and extend the multi-week climb.
GBP/USD Daily Chart (Confluent resistance)
AUD/USD turning down from resistance
AUD/USD is set up to trade lower in-line with the longer-term trend. It’s currently turning down from the July trend-line, working its way towards the lower parallel of a developing channel off the monthly low (best seen on the 4-hr). A break of the lower parallel should have significant support under the 6700-level back under siege. The more times it is tested (already 4 times since early August) the more likely it is it will eventually break.
AUD/USD Daily Chart (turning down from trend-line)
AUD/USD 4-hr Chart (watch developing channel)
USD/JPY trying to confirm H&S formation
USD/JPY’s rise last week put price just above the neckline of the head-and-shoulders pattern building since June. However, it is struggling to hold above last month’s high, so a little more strength would be ideal before getting too bulled up. The 200-day lies ahead at 10905, it’s also in approximate confluence with swing-highs created during the summer – this could make things difficult.
USD/JPY Daily Chart (H&S to confirm?)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
