Ascending triangle on the GBP/JPY

The Pound versus the Yen has found a good resistance on the 186.00 level, but it has not been able to break above it. However, on the 4 hour chart we can see that the price has formed an ascending triangle, which has bullish connotations. The ascending triangle formation has more probabilities of breaking to the upside, due to the fact that the lows are higher than the previous lows. This price action indicates that when the sellers try to bring the price down, they lose steam and the bulls come in and take the price back up. If we see a breakout of the 186.00 level, then we should wait for confirmation of the breakout plus the pullback before entering in a long position. It is not advisable to open a position before the price breaks out of the triangle, because it could come out in any direction.

The EUR/USD couldn’t hold above the 1.2500 level

Yesterday we saw how the EUR/USD broke above the 1.2500 level, but it then retraced rapidly to the downside, clearly the bullish momentum was not sufficient to keep the pair above that round number level. Today there has been continuation to the downside and the pair is currently trading at 1.2466. Fundamentally the Euro could remain weak versus the Dollar and that is why we could see the price testing the 1.2400 level again.

Consolidation on the USD/JPY

The USD/JPY ha reached four year highs when it came close to touching the 119.00 level, but it started retracing and it has stay consolidated around the 118.00 level. On the 4 hour chart we can see that the price has been oscillating around the 118.00 level and has formed a symmetrical triangle. The symmetrical triangle is a continuation chart pattern; therefore, it is assumed that the price has a higher probability of breaking to the upside. However, we cannot bet the house on this, because the breakout may happen in any direction. For now the 119.00 remains as its nearest resistance and the 117.00 level as its nearest support.

Bounce on the EUR/GBP from the 55 day EMA

The Euro versus the Pound reached the 55 day exponential moving average on Friday, just above the 0.7900 level. Today we have seen that the price is trying to bounce to the upside from that zone. We don’t know for sure if there is going to be a continuation to the upside and a possible visit to the 0.8000 level where we can also see the 200 day exponential moving average (blue line). Therefore, the best thing to do is to wait and see if the pair continues correcting or if it tries to break below the 0.7900 level. If there is a breakdown of the 0.7900 level, then the pair has the road open to reach the 0.7800 level.

Downtrend continuation on the EUR/USD?

On the daily chart of the EUR/USD we can see that the 55 period exponential moving average has crossed below the 200 period exponential moving average since the middle of this year. This is what they call in technical analysis a “death cross”. The moving averages cross overs are not very accurate as entry signals, but when the 55 EMA crosses above or below the 200 EMA, this could indicate a possible continuation of the trend in the direction of the cross.

On the EUR/USD we can see that since the EMAs cross, the price has kept its downtrend, even though in some occasions it has tried to correct to the upside. Today we see that the pair has come back down and if we see a breakdown of the 1.2400 level, the longer term bearish trend on the EUR/USD may continue. 

The USD/JPY reaches the 119.00 zone

The Yen keeps losing ground versus the Dollar and we can see that the USD/JPY has reached the 119.00 and it could head towards the 120.00 level if during next week the fundamentals out of the United States come out better than expected. However, at the moment the pair has retraced approximately 100 pips and it is visiting the 118.00 level. From this area the pair may try to bounce to the upside and if there are no important fundamentals that affects it, the pair may stay consolidated between the 118 and the 119 levels.

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Attention to a possible breakout on the EUR/GBP

The Euro versus the Pound has come back to its bullish trend and it has visited one more time the 0.8000 level where we can also see the 200 Day EMA. If the price breaks above the 200 Day EMA, we may get a good opportunity to go long, but first we must wait for confirmation of the breakout and the pullback to the same moving average before thinking going long. For now the zone is acting as a good resistance area.

Excellent bearish bounce on the EUR/GBP

The Euro had been gaining a lot of ground versus the Pound during last week and today we saw that the price reached the 0.8000 round number level and the 200 Exponential Moving Average (blue line) on the daily chart. These have been so far the two main reasons, plus a 76.4% Fibonacci level around the zone, that have kept the price at bay and it is currently showing a bounce to the downside from the 0.8000 area. Just below the 0.7900 we can see the 55 Day EMA (purple line) which could contribute to making the 0.7900 level a good support. Therefore, we must be attentive to a possible visit to the downside to the 0.7900 area.

Possible visit of the EUR/GBP to the 0.8000 level

The Euro continued gaining ground versus the Pound during today´s trading session and closes the week to the upside. If the bullish momentum persists, then the pair may reach the 0.8000. A little bit above the 0.8000 level we can see the 200 day exponential moving average, which may contribute to make this zone a very important resistance area. Therefore, a bounce to the downside from the 0.8000 area may be expected.

Ascending Triangle on the EUR/USD

The Euro has been consolidating versus the Dollar, but it has been making higher lows with the 55 period Exponential Moving Average on the 4 hour chart as resistance, forming what it seems like an ascending triangle. If we use the 1.2500 level as the upper line of the triangle, we can see the formation much better.

If there is a bullish breakout of the 1.2500 level, then the best thing to do is to wait for confirmation of such breakout and then the pullback for a possible long entry. However, the price may also break to the downside causing the pair to continue with its bearish long-term trend.

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A Hammer formation has been confirmed on the EUR/USD daily chart

On the daily chart of the Euro versus the Dollar we can see that the 1.2500 zone has been a very important area of support for the pair. This zone becomes even more relevant when we see that on Monday’s daily candle, a Hammer Japanese Candlestick formation has been created. When Tuesday’s candle closes in the green, the pattern has been confirmed and we could see the pair trying to go visit the 1.2600 level.

The AUD continues dropping

The Australian Dollar has been affected by the recent monetary policy of the Reserve Bank of Australia and the slowdown in manufacturing from China. Due to the fact that China is the main trading partner of Australia, when the Chinese economy slows down this is reflected on the Australian economy and on the AUD.

On the Daily chart we can see that last Wednesday the price tested the 55 exponential moving average only to bounce back down from that level. Today we see that the bearish momentum accelerates and we could possibly see a visit of the 0.8650 zone, which has been a very good support area for the pair in the past.