EUR/USD could test 1.1500
If we study the major forex charts we can pick out some strong potential trading signals for the end of the week and the week ahead. Let’s take a look at AUD/USD, NZD/USD, USD/JPY, EUR/USD and USD/CAD.
AUD/USD has been trading in a range from 7320/10 up to 7450/55. When shorting at the top or buying at the bottom of the range, look to take at least some profit in the middle at 7395/7405. A move below 7400/7390 now risks a test of trendline support at 7325/15, where long positions need stops below 7290. A break below (with a weekly close for confirmation) is a medium-term sell signal for the start of next week.
Holding above minor resistance at 7390/7400 would allow a recovery to resistance at 7440/50. Short positions here need stops above 7470. A better selling opportunity is at 7500/10, with stops above 7540. A break higher would be an important medium-term buy signal.
For NZD/USD a move below 6780 targets 6760 before a buying opportunity at 6715/10. Try long positions with stops below 6680. A weekly close below here is an important sell signal for the start of next week.
We have minor resistance at 6790/80 but a move above here allows a re-test of strong resistance at 6850/60. Try short positions with stops above 6880. A sustained break higher is our buy signal for this week.
The USD/JPY outlook is positive as long as we hold above important trendline support at 111.30/10. Holding above minor support at 111.60/50 allows a recovery to 111.85 before minor resistance at 112.10/20 today. A move above 112.30 targets 112.60.
The best support for today is at 111.30/10. Long positions need stops below 110.90. A break lower therefore acts as a sell signal targeting 110.65/60 and 110.30/20.
EUR/USD breaks lower trendline support at 1.1620/10 to test the July low at 1.1572. A break lower targets 1.1520/10. A weekly close below 1.1500 is a sell signal targeting 1.1460/50.
We are severely oversold in the short term. Holding 1.1572 targets 1.1620/25, perhaps as far as minor resistance at 1.1680/90. Above here we meet strong resistance at 1.1740/50. Short positions need stops above 1.1770. A break higher would be a very strong medium-term buy signal.
USD/CAD is still holding strong 500-day and 100-week moving average support at 1.2990/80 in oversold conditions. This is obviously key to direction but we also have decent support at 1.2965/60 and strong trendline support at 1.2940/30. So bears have a battle on their hands if they want lower prices.
Try long positions in the 1.2960/30 area with stops below 1.2890. A weekly close below here would be a strong sell signal for the start of next week.
We have minor resistance at 1.3020/30, then 1.3045/50 is more of a challenge. We are therefore likely to pause here (and in fact topped six pips below here yesterday). On further gains look for 1.3070 and minor resistance at 1.3090/95.
Technical Analyst & Trader
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