Technical Report – April 23, 2013: AUD/USD Breaks Critical Fib Support

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Chart of the Day: AUD/USD

Tech report 23.04.13

AUD/USD: The AUD/USD saw a continuation of its previous short term declines and the pair has now broken critical Fib support after failing at the upper end of its long term symmetrical triangle. This is an extremely bearish event for the pair and puts big limitations on the medium term prospects for the AUD. The most immediate support level can be found at 1.0270 but any follow through to the downside from these levels calls for a full retracement back into the 1.0120 area. To the topside, resistance now comes in at 1.0360, and we would need to see a positive break here in order to turn the bias back to neutral.

EUR/USD: The EUR/USD volatility has started to stabilize but we are starting to see some negative structures on the daily charts that are pointing to some near term US Dollar strength. Specifically, this means that the head and shoulders pattern that has formed just above 1.31 is now suggesting some bearish follow through if the neckline at 1.3020 gives way. In the reverse scenario, a bullish break of 1.3120 would invalidate the head and shoulders pattern and target the yearly highs seen at 1.3195.

USD/JPY: The USD/JPY continues to be one of the biggest movers in the forex markets and prices are once again focused on a test of the 100 level. Prices failed in this area (99.80) previously, so there are a few technical barriers to break before we can see an upside break of the main psychological figure. To the downside, support is not seen until the 98.40 area, so those looking to enter with a buy on dips strategy will have some time to wait before seeing suitable levels for new longs.

GBP/USD: The GBP/USD is obeying its short term bullish uptrend channel on the 4H charts, but we are starting to come into the support line and this channel will be invalidated if we see a break below support at 1.5225. A downside break here is suitable for short breakout trades, otherwise the next level of resistance can be found at 1.54, which is also a critical Fib level.

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