Breakout and pullback pattern on the EUR/JPY

The Euro versus the Yen has completed a breakout and pullback pattern on the weekly chart around the 200 week exponential moving average along with the 131.00 round number level. It is possible for price to continue falling, but the 126.08 area may act as support. To the upside, the 134.00 or the 135.00 could act as resistance in case the price breaks that moving average to the upside.

China’s economy still in doubt

The People’s Bank of China has been selling Dollars as a way to mitigate the damage caused by the falling Yuan and that has taken China’s foreign reserves to their lowest level since 2012. According to some reports by the PBOC, its reserves have shrunk by about 99 billion Dollars. The drop in China’s reserves have been more than what most analysts and economists were expecting. This has brought up some questions as to how long will it take for the Chinese economy to get back in track. That is why for this upcoming week there could be more risk aversion in the markets and we could probably see safe-haven instruments like the Yen rally along with gold and government bonds.

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The EUR/GBP breaks triangle pattern

The Euro strengthen for today versus its major counterparts and versus the Pound we can see that the price breaks above the ascending triangle. On the daily chart of the EUR/GBP we had identified a few days back the formation of an ascending triangle with a good support at the 0.7523 level with an upper trendline. The 0.7523 has been acting as a good support from where the price bounces to the upside and breaks the upper trendline. At the moment the price seems to be heading higher and if it reaches the 0.7756, then that level could act as resistance.

Huge drop on the USD/JPY

The Yen strengthen for today as risk aversion comes back into the markets. On the daily chart of the USD/JPY we can see how the pair dropped rapidly from the 120.00 level to the 117.00 level, which is a 300 pip drop. A 300 pip daily range for the USD/JPY is very unusual. When the price reached the 117.00 level, it bounced to the upside and right now is kind of finding some resistance at the 118.00. For now the 117.00 may act as a support, but if it breaks that level to the downside, then the next round number level of the 116.00 could act as support.

Good resistance on copper

The March contract for copper has found a good resistance area on the 206.00 level. Even though in some occasions the price has tried to break above the 206.00, by the end of the day the price closes below the 206.00 level as shown on the daily chart. If the price retraces to the downside, then the 200.00 could act as support. On the other hand, if the price breaks above the 206.00 level, then the 215.00 could act as resistance.

The USD/CAD goes back to the 1.4100 level

The US Dollar versus the Canadian Dollar goes back up to the 1.4100 level. That level may act as resistance and price may try to bounce to the downside from there. A little bit above the 1.4100 level, we can see the 21 day exponential moving average, which could also contribute in turning the area into resistance. However, if the price breaks to the upside, then the 1.42 or the 1.43 could act as resistance. To the downside, the 1.3900 zone could act as support.