A lot to talk about today as we had some large moves in several currency pairs. Some of these moves were rather surprising, including the large bearish day for GBPUSD and other Pound crosses. But before we get to those, let’s see where we are with AUDUSD.
For those who have been following along, you know that I’ve been tracking AUDUSD ever since it formed the bullish daily pin bar on May 2nd. The pair has had some trouble climbing above the .938 level over the past few days. In spite of this, the directional bias remains to the upside. Price action is now resting on the top of the wedge that I pointed out in yesterday’s post.
Although the uptrend is still in tact, I’m not overly convinced with the way price action is starting to crowd the top side of this wedge. A quick retest with a burst higher would have been ideal to maintain a bullish conviction.
GBPUSD price action looked extremely bearish today, breaking the 1.682 level that I mentioned in yesterday’s post. This was a key level that the pair needed to hold in order to maintain the short-term uptrend from March.
So where do we go from here?
Based on today’s price action, a retrace to the 1.682 level (this time as resistance) isn’t out of the question. However if the downward pressure is strong enough we may not see a retrace, and instead move toward the next key support level which appears to be around 1.667.
Following on the heels of GBPUSD was GBPJPY with a huge bearish day. At this point, price action appears to have broken the wedge that has been forming since late last year.
Although not as clear as GBPUSD, the next key support level looks to be the 167.70 level as shown below. There is also another level in the 169.50 area that may provide some support.
I’ve been tracking EURNZD since it formed the bearish pin bar on May 8th. Since the close of that pin bar, price action has dropped nearly 200 pips. In yesterday’s post, I mentioned that a break of support in the days ahead wouldn’t surprise me. It looks as though today provided that break.
As always, these levels in the market should be thought of as zones rather than definitive lines. Therefore the potential for a false break should always be accounted for.