The EURUSD lost more ground last week after buyers failed to clear trend line resistance near 1.1200.
I wrote about this level on August 13th.
The fact that buyers weren’t able to clear that 1.1200 area was pretty telling.
Last week’s rejection from that resistance level has led to what appears to be another lower high on the daily time frame.
The question is, will it lead to another lower low?
The pair would need to clear that 1.1030 support area to do that.
But as long as 1.1110 holds as new resistance this week, that’s a genuine possibility.
Alternatively, a close back above 1.1110 would re-expose that 1.1180 region.
GBPUSD looks poised for a bounce this week.
I mentioned last week that buyers needed a close above 1.2100 to trigger a move back to channel resistance near 1.2300.
Friday’s close did just that.
The only reservation I have about last week’s move is that it occurred on a Friday.
It’s often the least liquid day, which means breakouts are prone to failing.
That doesn’t mean GBPUSD won’t find support at 1.2100, but I do think it’s a good idea to wait for some type of bullish price action from here.
As for resistance, that channel top near 1.2300 is likely going to attract sellers.
The USDJPY rebounded last week from the 105.00 support area.
I wrote about the potential for a bounce from here last Sunday.
There is a descending channel that extends from the March low and April high. You can see how the pair encountered buyers here on the 6th and 7th.
For this reason alone, I was not interested in shorting USDJPY.
In fact, I haven’t been interested in buying or selling the pair. I felt that the market needed more time to figure out where it wants to go.
But just because USDJPY caught a bid at 105.00 doesn’t mean it’s time to buy, at least not for me.
Notice how that 106.80 region has attracted sellers on the last few attempts.
That isn’t surprising given that 106.80 was the June 25th low. As we know, former support becomes new resistance.
Until USDJPY climbs back above 106.80 on a daily closing basis (using a New York close chart), buyers are going to continue to struggle.
I like the idea of buying the pair, but not until buyers clear 106.80.
That could take the pair back to channel resistance at or above 108.00, so there’s no need to rush an entry.
We caught an exceptional short on AUDUSD a few weeks ago.
The setup materialized on July 25th when the pair closed below ascending channel support.
We were then able to ride AUDUSD lower to that 0.6750 support area.
But since reaching our target on August 5th, the Australian dollar has stalled out a bit.
That isn’t surprising, though.
The pair is sitting on channel support near 0.6730 and has also caught a bid recently at the 0.6750 horizontal level.
Even if AUDUSD closes below channel support, I won’t entertain a short as that type of breakout is usually the start of a bear trap.
On the other hand, buyers need to take out that 0.6820/30 resistance area if they intend to push prices higher this week.
As long as 0.6830 holds as resistance on a daily closing basis, the AUDUSD will remain under pressure.
A close above 0.6830 would expose the next key resistance at 0.6910.
The GBPJPY has lost a lot of ground in recent weeks.
Since closing below the 135.40 area on July 15th, the pair has sold off by nearly 900 pips.
However, last week’s price action looks relatively constructive for buyers.
First, notice how the market held that 126.80 support region.
Second, GBPJPY carved what appears to be a higher low between the 14th and 15th of August.
Third, the pair challenged the 129.60 resistance area on Friday.
Although buyers weren’t able to clear 129.60 last week, the higher low into this area may trigger a break higher this week.
That’s just something to watch as there is no confirmed setup at the moment.
A close above 129.60 would expose the next key resistance at 132.20.
Alternatively, a close below 126.80 would open the door to fresh lows including the support area just below 123.00.