Last week: It was a relatively quiet week for trend line breakout trades but that was not surprising given the huge moves over recent weeks. Another feature that might be giving some FX pairs pause though is the fact that they’re sitting near significant long-term S/R levels. This is the case for the EUR/JPY (135), AUD/USD (0.80), AUD/JPY (89), NZD/USD (0.73), GBP/USD (1.40), GBP/JPY (weekly 200EMA), EUR/AUD (1.55), GBP/NZD (1.90), EUR/NZD (1.675), EUR/GBP (0.89) and even BTC/USD ($10,000).
Trend line breakout & TC signal tally: there were a few trend line breakouts last week and these were noted on my site during the week here:
- GBP/JPY: 160 pips.
- USD/JPY: 70 pips.
- AUD/JPY: 70 pips.
- Gold: 60 pips.
Next week:
- FX Indices: Both FX Indices closed lower for the week but remain aligned for ‘risk on’, albeit only just. An update on both FX indices can be found through this link.
- Triangles: these FX pairs remain consolidating in weekly triangle patterns so keep an eye on the bigger picture patterns here: AUD/JPY, AUD/USD, NZD/USD and USD/JPY. The EUR/USD and EUR/JPY are in monthly triangles.
- Oil: the monthly chart’s ‘Inverse H&S’ breakout continues with a target near $85.
- Bitcoin: I’ve been keeping a closer eye on Bitcoin as it edged down closer to the two main support levels in my sights: I’m watching for any potential reversal at either the 50% fib, near $10,000, or the 61.8% fib near $8,000. I wrote an article about this mid-week that can be found through this link. I rose early on Saturday morning as the US market was closing to place the next batch of Option trades for February. I sold the RIOT Feb $13 Put for $0.70 so that is my proxy trade on Bitcoin:
BTC/USD daily:
RIOT daily:
- Central Bank updates: there are two Central Banks reporting interest rate updates this week: the ECB (EUR) and the BoJ (JPY).
- News: Apart from items on the Economic calendar traders need to be aware of impact from news related to the US Government shutdown, Brexit and NAFTA.
- ASX-200 / XJO: I had been looking for a test of the key 6,000 level and this has now triggered. Thus, I’ll be looking for any bullish continuation with this move:
Calendar: High impact items of note include the BoJ Monetary Policy Update, NZD CPI, the ECB rate update, GBP Employment, Prelim GDP and USD Advance GDP and Durable Goods data. There are also speeches on Friday from the BoE Gov Carney and BoJ Gov Kuroda.
Forex: as always, if the trend line breakouts trigger to the downside then I look to the 4hr chart’s Fib levels as targets for any reversal move.
EUR/USD: The EUR/USD has spent the week consolidating below the key monthly 200 EMA. The 4hr chart has a Bull Flag appearance so any breakout to the upside would have me looking to the major 1.26 level.
The weekly chart’s 61.8% fib is near 1.26 and this region also intersects with the monthly chart’s 10-year bear trend line so this remains the target for any bullish continuation move. The 1.26 remains about 400 pips away so is well worth stalking.
- Watch the 4hr chart trend lines and monthly 200 EMA for any new breakout; especially with this week’s ECB rate update. Any pullback would have me looking for a test of the key 1.20 level.
EUR/JPY: Price has closed the week again back above the major 135 level, a fact that remains significant, and this level can be seen as clear long term S/R on the monthly chart.
- Watch the 4hr chart trend lines and 135 region for any new breakout; especially with the ECB and BoJ rate updates:
AUD/USD: The Aussie has now closed above a major 5 year bear trend line and this has brought the key 0.80 level into focus. The monthly chart reveals how significant this 0.80 level is for this pair and I still consider that any break and hold above 0.80 would be a very bullish signal.
Any bullish breakout above 0.80 would then bring the 0.90 into greater focus as this is previous S/R, it is the weekly chart’s 50% fib of the recent swing low move and is also near the monthly chart’s bear triangle trend line. Thus, as mentioned last week, a break and hold above 0.80 would have me looking for a move up to 0.90.
- Watch the 4hr chart trend lines and key 0.80 level for any new breakout.
AUD/JPY: Price action continues to consolidate just below the major 89 level and a 3-year bear trend line.
Any close and hold above 89 would be rather bullish and would bring a weekly triangle breakout into contention. Such a breakout would bring 90 into focus and, after that, the next major target would be 95 which is another S/R zone and just under the monthly chart’s bear triangle trend line.
- Watch the 4hr chart trend lines and key 89 level for any new breakout; especially with the BoJ rate update.
NZD/USD: Price action continues to consolidate under a 3-year bear trend line and near the 0.73 level.
- Watch the 4hr chart trend lines and the 0.73 region for any new breakout:
GBP/USD: The 1.40 level is in focus now after a bullish 2 weeks for the Cable.
The weekly chart shows that the bullish triangle breakout is still underway and I’ll be watching for any continuation up to 1.40, the weekly 200 EMA and, then, the weekly 50% fib near 1.4333 level.
- Watch the 4hr chart’s triangle trend lines and key 1.40 level for any new breakout.
USD/JPY: Price action is consolidating in a triangle on the 4hr chart that is set within a larger triangle on the weekly chart.
- Watch the 4hr chart’s trend lines for any new breakout; especially with this week’s BoJ rate update.
GBP/JPY: The weekly 200 EMA remains as considerable resistance for this pair and price retreated to close below this major level.
- Watch the 4hr chart trend lines and weekly 200 EMA for any new breakout, especially with this week’s BoJ rate update:
GBP/AUD: Price action has been consolidating in a triangle for the last week and a half.
- Watch the 4hr chart trend lines for any new breakout:
GBP/NZD: Price action has been consolidating near the key 1.90 level for much of the last six weeks.
- Watch the 4hr chart trend lines and 1.90 level for any new breakout:
EUR/AUD: Price action has been consolidating in a triangle either side of the key 1.55 level for the last few months. See the monthly chart for the significance of this 1.55 level.
- Watch the 4hr chart trend lines and key 1.55 level for any new breakout:
EUR/NZD: Price action has been consolidating in a channel and near the key 1.675 level for the last few months.
- Watch the 4hr chart trend lines and key 1.675 level for any new breakout:
EUR/GBP: I don’t normally chart this pair but given the fact that so many FX pairs are consolidating near major S/r levels I thought I’d note that this pair is doing much the same; near 0.89:
Gold: Gold looks to be forming up within a 4hr chart Bull Flag. A bullish breakout here would support the Bull Flag on the monthly chart.
- Watch the 4hr chart trend lines for any new breakout:
Oil: Oil looks to be forming up within a 4hr chart Bull Flag as well. Note that the monthly chart’s Inverse H&S move continues to develop and this has a target near $85 but the weekly chart shows the 61.8% fib near $80 so both levels would be in focus for any continuation move:
- Watch the 4hr chart trend lines for any new breakout:
