Today I've posted thoughts on chart signals in the Australia 200 and some of the FX pairs that caught my attention this morning
Australia 200 failed to breach resistance at 5458 yesterday and remains largely range bound. Price has moved back above the 20 day moving average this morning. This is now providing support in a zone around 5400. A clear break above resistance at 5458 would indicate resumption of the uptrend. Looking at things the other way, a break below the late September peak at 5320 could be a sign of weakness and suggest a deeper correction.
FX Chart Signals
AUDUSD. The trend continues lower on the daily chart with yesterday’s candle making both a lower low and lower high. Price has also drifted below the 55 day moving average but possibly not yet by far enough to be clear of the support zone around that level. Below this the 50% retracement of the major rally at .9306 and the early September low at .9280 provide the next potential support zone. The early November low at .9421 represents potential resistance.
EURUSD remains inside the very large candle of the ECB rate cut day (last Thursday). This leaves no real change in the big picture. The trend is down with moving averages providing potential support and resistance markers. The 55 day sma now provides potential resistance around 1.3484 while the 200 sma could support the market around 1.3216.
GBPUSD. Cable looks like it might be setting up for a reversal pattern. There are a couple of ways you could label this. One may be as a conventional double top. The other may be as something more like a “complex head and shoulder”. Either way it represents a drift sideways, sitting at the top of a well-established uptrend. This suggests a clear break of the support at the bottom of the pattern could set up for a significant downward correction. In the meantime, price is testing the 55 day moving average with a break below that potentially serving as an early indicator of weakness to come.
USDJPY – remains inside a symmetrical triangle formation. Downward sloping resistance currently intersects around 99.70 while upward sloping support cuts in around 97.00. Price has bounced off the 200 day moving average which now provides potential near term support around 97.78. A rally to and rejection of the triangle resistance might be a sign of weakness at this stage as would a clear break below the triangle support.