Chart of the Day: AUD/USD
AUD/USD: The AUD/USD is continuing with its short term declines after failing at the upper end of its long term symmetrical triangle. The triangle resistance line now comes in at 1.0530, so markets are at a critical inflection point and will soon be forced to make a decisive choice to break above this consolidation pattern or trade back below the daily moving averages. At the moment, bias calls for additional losses as prices have fallen below support at 1.0350, which also marks the 100/200 EMA cluster. Indicator readings are flattening out in neutral territory but without a bullish surge before the end of the week, momentum readings are reading to start showing negative signals. Next support comes in at 1.0210.
EUR/USD: The EUR/USD has picked up in volatility since breaking the 1.31 level, and first topside resistance can be found at 1.32. Prices quickly reversed in this area, however, so it is looking like we will need to see a drop back into the 1.3080 region before we start to see buyers re-emerge. This area markets strong “resistance turned support” so we are not likely to see a strong downside break here on first test. Indicator readings are still in positive territory, so the pair has a buy on dips bias.
USD/JPY: The USD/JPY has been one of the biggest movers so far this week, with prices falling to lows of 95.80 before reversing. This area now marks critical support to the downside and if we do see a bearish break here, the next target will be found at 92.70. The sharp midweek reversal, however, puts the focus back on the yearly highs at 99.80. A rise back into this area will be an acceptable entry point to sell, with stops above 100.
GBP/USD: The GBP/USD is forming a bullish uptrend channel on the 4H charts, and this is encouraging given the strength of the downtrend that marked the early part of the year. Shorter term, the break of support at 1.5270 led to some triggered stop loss momentum and since this is also where the 100/200 EMA cluster on the 4H charts comes in, a test of the support line in the uptrend channel is now expected.