Last week: This is only a brief update as I am still in summer holiday mode down here. Some TC signals triggered during my break but have now closed off, however, the EUR/AUD signal has surprised me and continued on. There have been some significant breaks of support on some pairs and these levels are worth watching for any possible test before continuation. The market mood is still very much one of ‘risk off’ with broad based concern about the perceived China slow-down, Oil price weakness and reduced global growth. Just how much further this sentiment develops is the $64 question!
There were four TC signals that triggered whilst I have been on holidays, three of these being Yen related, but all have now closed off:
- E/J= 350 pips, A/J= 330 pips, U/J= 230 pips and the NZD/USD = 150 pips.
- The E/J and A/J signals also triggered along with major triangle breakouts for added confluence, the NZD/USD signal came along with a channel breakdown and the U/J evolved along with a significant trading channel breakout.
- The EUR/AUD triggered a new TC signal during last week and was caught in its very early stages. This signals is currently up 480 pips but there could be a lot more to come with this move.
- There have been some other very obvious triangle breakdown trades as well involving GBP weakness. The GBP/JPY has given 1,300 pips of a possible 1,600 triangle breakout move and the Cable has given 370 pips of a possible 1,600 triangle breakout move. Both of which were closely stalked here before their breakout.
A number of FX pairs have recently broken key S/R levels and this may offer new trading opportunities, especially if these levels are tested again before any possible follow through. This is something to watch out for for sure. The NFP result was a bit of a mixed bag. The jobs component was strong but I’m sure the miss on wages (hourly earnings) would not be pleasing to the Fed.
Chinese CPI was released on Saturday and was lower than expected but still better than the last result. It remains to be seen how the markets will react to this data at the Asian market open, especially the AUD$ and NZD$. Some traders will see this as ‘glass half full’ but others will be sure and see it as ‘glass half empty’.
Data to watch for:
- Sat 9th: CNY CPI: this was lower than expected but still better than the last result.
- Mon 11th: JPY Bank Holiday
- Tue 12th: GBP Manufacturing Production.
- Wed 13th: CNY Trade Balance.
- Thurs 14th: AUD Employment data. GBP Interest rates. USD Weekly Unemployment claims.
- Fri 15th: USD Retail Sales, PPI & Prelim UoM Consumer Sentiment.
US$: The US$ index closed the week with a bearish coloured ‘Spinning Top’ candle and this retreat was sparked after NFP with the ‘wages’ miss seeming to have impacted here. Price action is embedded within both the daily and 4hr Ichimoku Clouds suggesting potential choppy price action over the next couple of sessions at least.
US$ index monthly: The Bull Flag has not been able to clear the 100 resistance level and, until it does, there is just as much potential for a bearish ‘Double Top’:
US$ Index weekly: I’m still waiting for a breakout from the 100-92.50 trading range where price action has remained for the last 12 months:
EUR$ index weekly: the inverse is happening here. Price is holding above 96 support for now after bouncing up off this level during last week. And, in a ‘what a difference a day makes’ kind of way, price action is back trading above the 4hr and daily Ichimoku Cloud which is bullish!:
EUR$ index 4hr: showing the bounce off strong 96 support:
Gold : has made a bullish close above the $1,100 S/R level and this is keeping the bullish descending wedge alive. Some may scoff at my technical patterns but look back at the recent, and very productive, triangle breakouts on the Yen, GBP and EUR/AUD pairs! A bit of US$ jitters and some ‘flight to safety’ activity is helping to support this metal.
Gold weekly: watch for any bullish wedge breakout:
Oil: price closed for the week below the 2009 low but it would be prudent to wait and see where this fairly new monthly candle does eventually close. I’m on the lookout for any support from this level in the coming months but, if not, the $20 and $10 handles look like they could be targets:
CL monthly: watch for any monthly candle close up off $33.55 region but, if not, then keep an eye on the $20 and $10 handles. BTW: Any support here, or failure for that matter, will have implications for the CAD$.
S&P500: price is down testing the monthly support trend line but we need to wait and see where this monthly candle does eventually close.
S&P500 daily: down but not out yet.
S&P500 monthly: a monthly candle break of the monthly support trend line might deliver the test of 1,600 I’ve been looking for:
EUR/USD: the monthly chart below shows price action conforming to a triangle with the Elliott Wave indicator supporting bullish follow through off any upward bounce. However, the weekly chart shows price as range bound in either a basing-style ‘Double Bottom’ or Bear Flag and with neither pattern winning out just yet:
E/U weekly: keep an eye on 1.045 support:
EUR/JPY: The E/J gave a new TC signal and triangle breakout move whilst I was away that has delivered up to 350 pips before closing off. Note how price bounced off the 126.50 S/R level and this is the level to keep an eye on in coming sessions. I’ll be watching for any new TC signals that trigger with a break or respect of this support.
E/J 4hr: watch 126.50:
E/J weekly: a break and hold below 126.50 would have me watching major fib levels as potential targets:
E/J monthly: my Hub software has more data and shows a break of a larger monthly triangle. The ADX hasn’t engaged here yet though:
E/J monthly Cloud: I’ve posted this chart quite a lot of times over recent months and still note the significance of this bearish Tenkan/Kijun cross. The monthly Cloud might lend support to the triangle trend line but, if not, there could be a lot more in this move. However, would the BoJ stand idly by and allow this to evolve?
EUR/GBP: This seems to be a bit of a ‘no-brainer’ trade, from a technical perspective that is. Price has bounced up off monthly trend line support and may be embarking on a bullish ‘inverse H&S’ breakout worth up to 500 pips.This target would bring price up to a previous S/R region near 0.80…confluence! Watch for any test of 0.75 and, then, bullish follow through.
AUD/USD: There has been a bearish monthly triangle break and, now, another weekly triangle break. The recent low near 0.69 might offer some support though and would be the level to watch in coming sessions if bearish momentum continues.
AUD/JPY: This pair gave a triangle breakdown and new TC signal last week that delivered 330 pips before closing off.
A/J 4 hr:
A/J monthly:The 89 level seems so far away now and the monthly chart would suggest that one should now be watching the 80 level:
GBP/USD: The Cable has also given a triangle breakdown that has delivered up to 370 pips. This was how the daily chart appeared in one of my brief updates whilst I was away:
This is how the daily chart appears now after this breakout move:
Cable weekly: the break below the recent ‘Double Bottom’ of 1.46 seems rather ominous:
Cable monthly: The next stop might be 1.40 if this monthly trend line doesn’t step in and offer any support. Any break and hold below 1.40 would have me looking to the 1.05 low back from 1985!
NZD/USD: The NZD/USD recently broke down from a trading channel and triggered a TC signal that gave 150 pips before closing off.
NZD/USD 4hr: Another new TC short signal was triggered in the second last candle of last week though:
NZD/USD daily: trend line support has been broken as well now:
NZD/USD weekly: is this the start of yet another 1,000+ pip big Bear Flag move?
NZD/USD monthly: if so, the monthly chart shows the next major support stepping in near 0.58 which, interestingly, is about 1,000 pips below current price. That is, in the ball-park region of the Bear Flag suggested move. Confluence….again!
USD/JPY: The USD/JPY recently broke down from a triangle pattern and triggered a TC signal that gave 230 pips before closing off. A new SHORT signal is trying to form but hasn’t evolved as yet:
U/J weekly: note the trading channel breakdown. Potential support levels are highlighted on the chart:
U/J monthly: any pull back down to the 101.50 S/R level would tie in with developing a bullish ‘Inverse H&S’ AND the ‘Handle’ for the ‘Cup ‘n’ Handle pattern:
GBP/JPY: The GBP/JPY has given a text-book style triangle breakdown with 1,300 pips already being delivered of the potential 1,600 pip move. This is how the GBP/JPY daily chart appeared in my last blog update before leaving for holidays:
This is how the daily chart appears today:
GBP/JPY weekly: price action is getting down near another layer of previous S/R at 167. The weekly 200 EMA is also near this region. A move down to this level would provide the added 250+ pips to complete the 1,600 triangle move. More confluence!
GBP/JPY monthly: this chart shows the significance of the 167 level, an S/R level I’ve written about on many previous occasions:
This monthly chart has more data though and shows an even larger triangle that looks to be in the process of breaking down. Thus, there could be more movement to come here, if the BoJ don’t intervene that is:
EUR/AUD 4hr: so much for stopping at the 1.55 S/R level. This signal just kept going:
EUR/AUD daily: this TC signal came with a triangle breakout:
EUR/AUD weekly: what a huge weekly candle! One would suspect that some pullback could be in store here. A LONG trade with any pull back to test 1.55 might appeal to some traders:
EUR/AUD monthly: The 1.75- 1.55 trading channel has been of interest to me for some time. I had thought 1.55 would prove to be too much of a challenge for this pair but it seems that I was wrong, for now at least. Interestingly, the triangle breakout move target of 2,000+ pips would bring price back up to the top of this trading channel near 1.75. Confluence…yet again! For the time being though I’ll be watching to see if this monthly candle can close above this 1.55 support:
Because…this other monthly chart’s Elliott Wave indicator is suggesting a big fall! I don’t trade by this indicator at all but I do note it with some interest. With some hope too given I’m spending a month in Europe in April!
USD/CAD: US strength and Oil weakness have provided the perfect storm to develop my bullish Cup ‘n’ Handle pattern. A move up to the 2001 high near 1.60 seems pretty likely here now:
GBP/NZD: keep an eye on the 2.24 level:
GBP/AUD: keep an eye on the daily chart’s Flag trend lines and the 2.07 level: