Despite a slew of economic data last week, the moves in the EURUSD have been muted. Price finally managed to break out of the wedge I have drawn, suggesting a move to the 1.1530-1.1500 area is likely. While price remains below the wedge, my bias is to the downside, and I think the best opportunity would be selling rallies on the 4-hour chart.
If price gets down to 1.1500 or so, I’ll take a wait-and-see approach. We may see a bounce back into consolidation (not a bullish signal for me either).
The EURAUD finally broke out of multi-month consolidation on Friday. Once again, I’d like to sell rallies on the 4-hour. Will price manage to get back to the underside of the box? Historically, a throwback that gets all the way to the breakout level occurs about 50% of the time. The May lows at 1.53 interest me, some 350 pips away.
The final euro-pair I want to look at is EURJPY. Moreover, I think it’s signalling a similar opportunity. Price has taken out the recent swing low and broken below a supporting trendline. If you’re a buyer, you’ve got to be thinking that you want to start buying at 127.30, and if that fails, 125.50. Once again, I’m interested in selling rallies, and to numbers that the buyers will be watching are where I’ll be looking at taking profit.
The Loonie has reached a decision point. Bounce off long-term trendline support, or fail. So far, price has gingerly tested that trendline, dipping its toe in the water but not giving us a clue what’s next.
Scenario 1: Price tests the level and prints a big (and I mean BIG) bullish candle. That means we should hitch onto the buy.
Scenario 2: Price tests the level, and end up just sitting there. Movement (or lack thereof) like this would suggest that the trendline isn’t going to hold and we should be looking for a short.
Are there any markets you would like me to analyse? Just add them in the comments below.