TECHNICAL ANALYSIS
FX
Chart 11: GBP/USD weekly
is currently at 1.5208 but is trending downwards, so is likely to be much closer to 1.5000 by the time we get there. Tis
area average therefore will be
important and is unlikely to be beaten for a significant period of time.
Tere is of course a risk of a double top in the 1.4270-1.4344 area. Te pair is entering overbought territory, as we test this strong resistance area. Te next big test will come as we head towards support at 1.3710/1.3660. Holding here allows further consolidation and perhaps another opportunity to try to break above resistance area.
the 1.4270-1.4344
However, a clear break below 1.3650 signals the completion of a negative double top pattern and could very well send the pair back towards 1.3000.
SUMMARY
The US dollar is in a clear 13-month bear
trend but is holding good support at the 200 month moving at 88.25 in the index.
This may only be a correction of the longer term bull trend, but at this stage it is showing no signs of resuming that longer term trend.
The question is whether the 200 month moving average is strong enough to trigger a reversal. There is no pattern to suggest so at this stage. The longer we travel sideways, the more likely this is a consolidation of the bear trend, rather than a reversal pattern.
EURUSD is in a 15-month bull trend but has halted at important longer term resistance in the 1.2500/1.2600 area. Obviously this will need to be beaten for the dollar to continue lower with this pair.
The Yen has recently strengthened with the USDJPY seeing an important break lower after a yearlong sideways trend. The negative trend is likely to continue
seeing further dollar weakness. A break below the current
low of
104.55 acting as confirmation of a move towards the 2016 lows of 100.07/99.08.
GBPUSD has halted exactly at the 50% Fibonacci resistance and there is a clear double top risk as we top below 1.4300 this week. Obviously a sustained break above strong resistance at the recovery peak of 1.4344 is required for the next buy signal.
AUDUSD must hold strong support at 0.7635/0.7615 for the US dollar to remain the weaker of the pair.
USDCAD already appears to have turned after topping at the 2 year trend line resistance. A break below 1.2800 is the next sell signal.
Jason Sen
Professional Trader and Analyst Founder of Day Trade Ideas
FX TRADER MAGAZINE April - June 2018 23
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