Trend Line Analysis: 17/07/2015

Introduction to Trend Line Analysis
Welcome to our newest feature; Trend Line Analysis. Our professional market technician showcases intraday / swing trade setups on a broad spectrum of FX currency pairs. The most effective way to use the setup are:
▪ If indicated price zone holds; consider partial profit taking between 20-40 pips before aiming for the maximum listed target.
▪ If the price zone fails to hold; we likely to see price moving against us. Fail means; the candle closing higher or lower to indicated price zone.

 

Trend Line Analysis: 17/07/2015

XAUUSD
Gold has been in a constant downtrend since breaking under 1,500 handle and never was able to stage a rally to even test the break level remotely. The price action / movement on the gold has all but dried out but sensing something big to happen soon.

Looking at it from technical point of view; GOLD is about to test a major trend line coming right around to the 1100 handle. This trend line is supportive (declining support) and its importance is relevant for whenever we had a test to it or got close to it; there has been an impressive bounce. There are couple of other factors seen on pattern wise that makes this trend line paramount to hold the test. On the second chart (close up view) we can see the very current price action is forming a descending triangle (the two blue lines) but the bigger pattern in play is descending wedge (black T1 & blue T4). If we get a break under 1140 (descending triangle) we expect the price to hit 1104-06 zone and to carry a bounce off here. This bounce would hold weight if can achieve a weekly close back above 1142-44; indicating the bottom is in and we likely making a run to the top of the descending wedge. This could play out decently if the conditions are met and a run 124X can be seen. A break higher if can be achieved; we to see a possible run back to the 1,500 handle.

Alternatively; a break and a close under 1100-05 can knock the wind out of GOLD and can super-fast selling down to 7XX. To Sum it up…. 1100-05 now is critical for GOLD to hold and provoke a bounce else; the scenario on GOLD is looking horrid almost grotesque.
1140-41 break can look to sell for a 1106-08 target and buy off it with stops and reverse on a close under to the level mentioned.

GOLD – Weekly
GOLD – Weekly
GOLD – Weekly.. Close Up view
GOLD – Weekly.. Close Up view

USDCAD
The pair has been a steady up-trend ever since bottoming out to 1.19XX level and we been tracking it all the way to the 1.3000 mark which is now stone throw away.

There are many ways to deal with this level and look for its importance. To begin with it is a physiological level been an even number; along with it been a possible neckline of the Inverse H&S it is depicting. Along with that it is also coming up as an important trend line resistance and a channel top.

The extreme surge on Wednesday was no surprise with BOC slashing interest rate by 0.25 basis point. This fueled in a rally with the pair breaking higher to the initial listed resistance to 1.283X.

With the overall picture on the pair still bullish and looks to be heading higher for 1.34XX; as of now if we treat it as a possible neckline of the Inverse H&S it is depicting; we can expect a possible halt and a retrace lower to form in Right Shoulder before getting a lift off. At the present not expecting a deeper retrace but a possible revisit towards 1.2830-4X can be targeted if the level shows resilience. We can then expect an initial minor pullback before a re-attempt to test back the highs and as such if we can hold 1.3000-10 in coming days a retrace is on cards then.

A perfect scenario or a pullback off here can make its way down to 1.24XX which comes in as the most appropriate level for the Right Shoulder to put in a base and get a lift off.

UCAD daily
USDCAD daily
USDCAD – Daily Inverse H&S View
USDCAD – Daily Inverse H&S View

EURAUD
The pair has been trending higher but the surge has been halted to a weekly resistance to 5070 resistance which happens to be the 8 hr resistance as well. The fallout from recent high is largely attributed to the EURO weakness with the Greece crisis taking its toll.

While EURO still look shaky and fragile unless it can find a base to around the Thursday low and gets a push higher to 10990 level; else destine to test 10810 followed by more important support at 10710. The picture for AUD is no better and has been on free fallout ever since losing 0.7600 support. Like EURO it can also do a lot of catching up on the drop.

Coming back to the EURAUD; we have a decent looking supp right around to 1.4600-10 handle base on daily and the 4 hrs and if the price can halt to it; can expect a recovery on the pair; possibly testing all the way closer to 1.51 handle.

To sun it up; 4610-12 with stretch to 4600 is support and if it holds; we can see a bounce higher with initial optimum north target coming to 477X.

EURAUD – Daily. 1.4600 will define either we lifting up or trying lower towards 1.4400 handle.
EURAUD – Daily. 1.4600 will define either we lifting up or trying lower towards 1.4400 handle.
EURAUD 8 hrs
EURAUD 8 hrs
EURAUD Weekly. Possible Bull Flag as well there.
EURAUD Weekly. Possible Bull Flag as well there.
EURAUD 2 hr. Last but not least the 2 hr showing support upto around 4600 and if holds can provoke a bounce back to 4760-70 on an healthy intraday playout.
EURAUD 2 hr. Last but not least the 2 hr showing support upto around 4600 and if holds can provoke a bounce back to 4760-70 on an healthy intraday playout.

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