Last week: Both FX Indices have broken out from their respective Flag patterns and this led to many great TC signals and some trend line breakout trades last week. The surprise for some would be that the Euro index had most of the shine last week as its Flag broke to the upside whilst the US$ broke to the downside. I’m ignoring the noise and simply watching for momentum-based trend line breakouts and I’ll be doing more of the same in the coming week.
- Gold TC: 130 and 120 pips.
- USD/JPY TC: 40 and 100 pips.
- GBP/JPY: 95 pips.
- ASX-200 TC: 15 points.
- S&P500 TC: 16 points.
- DJIA TC: 170 points.
- NDX TC: 64 points.
- EUR/USD: 170 pips.
- GBP/USD: 60 pips.
- Oil TC: 200 pips.
- EUR/NZD: 170 pips.
- EUR/AUD: 120 pips.
- FX Indices: the US$ has been weak over recent sessions and an update on both FX indices can be found through this link.
- End of month: the month ends on Thursday so watch for any ‘end of month’ flow activity.
- Brexit: continues to be in the news so watch for any impact on GBP pairs, especially the Cable.
- US Tax Reform: this remains in the news as well so watch for any market impact from further updates.
- ASX-200: keep an eye on this triangle because, IMHO, it has a Bull Flag look to it. Any close and hold above 6,000 would have me looking to the 6,800 level as this is the previous High and also the target for the Cup ‘n’ Handle pattern that triggered recently:
Calendar: High Impact data includes the following:
EUR/USD: There was a breakout from the 4hr Flag last week that gave 170 pips and some great TC signals. Watch now for a test of the 1.20 S/R level which is 70+ pips away. Any break and hold above 1.20 would bring the weekly chart’s 61.8% fib into focus, near 1.26, as this also intersects near the weekly chart’s triangle bear trend line.
The EUR/USD is above the 4hr, daily and weekly Cloud but now negotiating the monthly Cloud.
EUR/JPY: The 135 remains as major weekly resistance for this pair and price is still consolidating in a Flag under 134 S/R.
Recall: there has been a recent Tenkan/Kijun cross on the monthly chart and that these are rare events and usually good for 2,500+ pip moves.
AUD/USD: US$ weakness has helped this to hold above the 0.755 S/R level. Note how price has closed the week back near the comfort and safety of the daily chart’s 61.8% fib. Keep an eye on the trend lines for any breakout, especially to the upside if US$ weakness continues:
AUD/JPY: Keep an eye on the trend lines, and 85 level, for any breakout, especially to the upside if stock strength continues:
NZD/USD: Much the same as for the Aussie: US$ weakness has helped this to hold above the 0.68 S/R level. Keep an eye on the trend lines for any breakout, especially to the upside if US$ weakness continues:
GBP/USD: The Cable is slowly but surely edging back up to the major bear trend line from the weekly chart’s triangle pattern. Keep an eye on the trend lines for any breakout, especially to the upside if US$ weakness continues:
USD/JPY: The 4hr chart’s 50% fib has held for now but watch the trend lines for any new breakout:
GBP/JPY: still watching the trend lines and waiting for a breakout:
GBP/AUD: Price action remains in a consolidation pattern near the major S/R level of 1.75 so keep watch of this for any new make or break.
Remember that a major bear trend line was broken recently so there may be more upside to come. However, any weakness would have me looking to the 61.8% fib of this whole swing-high move and I note this is down near previous S/R of 1.70:
GBP/NZD: Price action remians in a consolidation pattern near the major weekly 200 EMA S/R level so watch this for any new make or break.
A major bear trend line was recently broken here too so there could be a continued push higher. However, any weakness at this weekly 200 EMA level would have me looking at the support trend line and, then, 4hr chart fib levels for pullback targets:
EUR/AUD: this pair gave another great trend line breakout last week for 120 pips and this also triggered a great TC LONG signal on Friday for an 8 R trade to go with it.
The notes from last week remain relevant here: price is now back above the major S/R level of 1.55 (see monthly chart for significance of this key level) so watch for any new make or break from here. Recall this pair recently broke above a 9-year bear trend line so it could be on for some more recovery activity. However, despite this breakout, the monthly chart shows a trading band between 1.55 and 1.75 and these levels constrained a lot of price action between 1992-2008; a period of around 16 years. The bottom of this band if formed up by 1.55 and this has continued to be formidable resistance since 2008. In fact, since 2010 there have only been two monthly candles to close above this key S/R level. Price is poking its head above this region for now but I would not be surprised to see some choppiness set in as it works out whether it will make or break from this region. Any retreat from here, might only be temporary, but would have me looking at the previously broken 9-year bear trend line for a test followed by 4hr chart fib levels.
Thus, watch to see where the monthly candle closes on Thursday. Any close above 1.55 would still have me looking for a potential test of this region into the new month.
EUR/NZD: this pair also gave a great trend line breakout last week for 170 pips with the move triggering a great TC LONG signal on Friday for a 5 R trade result.
I’m watching for any push up to the 1.80 level, given it’s the next major S/R region to monitor, and this is still over 600 pips away so well worth watching:
Gold: Gold moved back up to the top of the 4hr chart’s triangle pattern last week and, in doing so, gave some great low-risk high reward TC signal trades. Keep an eye on the upper trend line in coming sessions, especially if US$ weakness continues:
Oil: Oil has FINALLY broken above the weekly 200 EMA and, in doing so, triggered a great TC LONG trade here on Friday for over 5 R! Watch to see where the monthly candle closes though because if there is another close above the Inverse H&S neckline then we could be on for an eventual push up to the target of $85. Keep an eye on the ‘whole-number’ levels along the way though: