If the situation in Greece was bumpy before, it’s downright jarring now. As you may well know, I only trade based on raw price action. However a situation such as the one taking shape in Europe at the moment certainly plays a role in developing a bias. Any technical trader who says otherwise is kidding themselves.
Of course the only trigger that will get me in a trade is a technical one, and so far the technicals for EURUSD are still telling me to stay on the sidelines.
It should be noted that the pairs recent inability to exceed or even match the May high at 1.1450 is a sure sign of weakness. A retest of channel support this week would be yet another indicator that the pair may be setting the stage for another push lower.
But for now I remain on the sidelines until a clear signal presents itself. Furthermore I’m choosing to only trade from the daily time frame given the uncertainty that is brewing in Europe.
Summary: Watch for a daily close below channel support which would expose the 1.0850 support level.
GBPUSD remains deadlocked between key horizontal support and trend line resistance from February of 2015. After a healthy 750 pip rally from channel support in early June, the pair struggled to maintain its footing above the May high.
This indecisiveness leaves us on the sidelines for now. In fact I have no intention of trading the pound until the market can either close above the four-month trend line or below channel support.
Summary: Wait for a daily close above trend line resistance or below channel support before further consideration.
AUDCAD is one pair that I have been keeping an eye on for a very long time. The .9410 level has acted as strong support since August of 2013, however so far this year the pair has struggled to carve out a higher high after each retest of support.
The weekly chart hints at the idea that the .9410 level may be the only thing standing between further consolidation and a much larger move to the downside.
The probability of a break of support grows stronger every time AUDCAD forms a lower high. But of course only a daily close below the level would trigger a short opportunity.
Summary: Wait for a daily close below .9410 and then watch for a retest as new resistance. Key support comes in at .9210.
One look at the AUDJPY weekly chart and there’s no doubting the fact that the pair has been in a broader uptrend since the 2008 and 2009 lows. But nothing lasts forever and there’s a strong possibility that this broader trend may be coming to an end.
As you can see from the chart above, the price action since February has become quite heavy. In other words the pair has had some real trouble rebounding from channel support between February and April and may be about to test it once again next month.
Although still caught in a 250 pip range, AUDJPY failed to break higher last week as the pair entered the final stages of a wedge pattern. This breakdown and failure to carve out a higher high may be a sign of further weakness over the coming days and weeks.
Summary: Watch for bearish price action on a retest of the 95.35 area this week. Alternatively, a daily close below 94.55 would offer an opportunity to sell on a retest of the level as new resistance. Key support comes in at 93.75, 93.00 and channel support at 91.80.
Last but not least is a pair I’ve been going on about for several months now. Since the start of 2015, NZDJPY has shown signs that it may be ready to put in a major reversal from multi-year highs.
The head and shoulders pattern as shown below began in February of 2014 and was recently confirmed on a close below the neckline.
On the daily chart we can see that Thursday’s price action respected former support as new resistance and subsequently sold off heavily during Friday’s session.
From here I’d like to see the 85.50 area hold as new resistance. The current 2015 low is sure to attract buyers at 84.05 along with the October, 2014 low at 83.34. However if the larger reversal pattern holds true, we could see a move down to 75.00 over the next several weeks and months.
Summary: For those who didn’t enter last week, look for a daily close below 84.05, which should begin acting as new resistance. Key support comes in at 83.34 and 82.25 with a long-term objective of 75.00.