AUD/USD, EUR/USD and gold: trading ideas for this week
This week my focus is on two forex pairs beginning to show negative signs, AUD/USD and EUR/USD. I’ll also take a look at the likelihood of an upward break in gold.
The failure of AUD/USD to beat strong three-year trendline resistance at 7760/65, as we can see in the chart below, is a negative sign going forward.
On the daily chart (below) we also have confirmation of a top from the double top pattern formed over the past week. Further confirmation of the sell signal would come with a break below important support at 7620/10 and the pair could initially target the 100-day moving average at 7500/7490.
EUR/USD is hitting longer-term 100-week moving average resistance at 1.1310/1.1315, plus nine-month trendline resistance at 1.1350/55. Within this range there is a good chance the pair will top.
In fact, judging by yesterday’s short-term candles and the sharp pullback from 1.1322, this rejection may already mark a high for the three-week recovery. The first downside target for this week is 1.1185/75.
Gold is trading sideways as we hold within the one-month triangle pattern, allowing the overbought conditions to ease. This is likely to be a consolidation pattern, meaning we will eventually break high to continue the year’s bull trend. Of course a break above the year’s high at 1375 would be further bullish confirmation.
A breakout to the downside in the triangle, however, could target the July low of 1311/10 and, if we see further losses, I’m still looking for an excellent buying opportunity at 1300/1297.
Technical Analyst & Trader
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