Trend Line Analysis: 21/07/2015

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.

Before we carry forward; I like to mention there is always a risk going on multi pairs of the same cross. Hence; it is advisable to choose one cross on the same pair for chances of one going wrong would indicate the other will be wrong as well.

So to limit exposure; caution is advisable. For the day we have 2 set on the same crosses.

1… AUDUD & EURAUD → Prefer AUDUSD Or Scale down on both positions if both comes in and opting to go for both
2.. USDJPY & GBPJPY → Prefer GBPJPY Or Scale down on both positions if both comes in and opting to go for both

XAUUSD
Gold likely have put in a temporary bottom to 1071 low and we will look for any re-attempt back to the 1068-70 zone to initiate long position for a 113X play.

Gold fell 60 USD from 1131.29 down to 1071.28 breaking the 5 years low, but managed to rebound strongly. The fall however was brutal with news on China selling gold and expectation of US rate. Fundamentally Gold can see more weakness as China been the main buyer in the past; if decides to reduce the holding can prompt another round of selling that can take the pair down to mid 9XX.

However looking from technical point of view; we feel that Gold just may have found a temporary bottom and can possibly try to stage a rally for a 1137-40 level. We however; would like to see another test lower to the Monday’s low and a rejection to consider going long for the intended target. Our extended target on the long resides to mid 116X.

GOLD Weekly - Main Channel in Play
GOLD Weekly – Main Channel in Play
GOLD Weekly - All in chart
GOLD Weekly – All in chart
GOLD Weekly - Close Up View and while the bear channel base has been tested ; we still need to get a weekly close higher to the upper black trend line to fortify the view on the temporary bottom is in. This trend line has been in play for a considerable amount of time and as such still holds weight.
GOLD Weekly – Close Up View and while the bear channel base has been tested ; we still need to get a weekly close higher to the upper black trend line to fortify the view on the temporary bottom is in. This trend line has been in play for a considerable amount of time and as such still holds weight.
GOLD 8 hrs – Last but not least; 8 hr channel support now is turning resistance and we like this dip to test the lows again and meet listed conditions to initiate longs.
GOLD 8 hrs – Last but not least; 8 hr channel support now is turning resistance and we like this dip to test the lows again and meet listed conditions to initiate longs.

EURAUD
We are interested to see a test closer to 1.456X zone to go long on the pair with a moderate target to 1.4750 or closer. Overall would prefer a run back to 1.486X handle if we can break and closer higher to 1.4750-60 listed resistance.

Nothing much has changed from our view posted on the Monday; apart from support and resistance both declined 50 odd pips. Fundamentally speaking AUD has more rate cuts in pipeline as initiated by RBA; EURAUD can provide an attractive risk to reward opportunity considering we hold to the desire level.

To sum it up; 1.456X is decent support and if it holds; we can see a bounce higher towards 1.4750 with extended support to 1.486X.

EURAUD 2 hrs. Intraday layout. A bounce off around 1.456X has a potential of a 300 pips rally
EURAUD 2 hrs. Intraday layout. A bounce off around 1.456X has a potential of a 300 pips rally

AUDUSD

The pair points to decent opportunities to set shorts up from 0.745X for a healthy risk to reward ratio. This level is coming up as a channel top on the main 8 hrs layout and if gets a test; interested to set shorts for a rundown to 0.7200 handle.

AUDUSD been a commodity currency has been hit hard by falling commodity and metal prices along with slowing down in China.

Adding fuel to the fire is RBA Governor Mr. Steven sounding dovish and a possible further interest rate cut is in the pipeline; while Fed Chairperson Yellen reiterating and on course to hike the rates. If today’s Monetary Policy Minutes Meeting reads dovish; AUD is most likely to find itself on the defensive footing and nail to the wall.

Technical picture also agrees with the fundamentals and it is all but a matter of time; before we see next round of selling on the pair.

To sum it up; while 0.745X offers best entry to go short; aggressive players will look to sell the 7320 break for initial target of 725X. A break under 7250 can make way for the optimum run down to 7200 handle.

Alternatively; can look to buy off 7200 support for a move back to 7250.

AUDUSD 8 hrs - Main layout
AUDUSD 8 hrs – Main layout
AUDUSD 4 hr – Initial support of 7245-50
AUDUSD 4 hr – Initial support of 7245-50

USDJPY
We are bullish on the pair but looking for dips to get into longs. 123.40-50 comes in as a decent looking retrace to get in longs for a possible run higher towards 125.5X.

With Yen interest rate at all-time low while US is poise to hike rates; we are expecting significant move to the higher side on a bigger picture. Technical aspect of USDJPY pins it higher as well. Beside the pattern that suggesting on long side to make its way to 125.5X with further potential grind higher towards 130 handle.

Hence; 123.4X retest and a halt suggests going long on the pair for an initial move towards late 124.7X.

Alternatively can look to sell from 124.7X test and a halt for a move down to 124.5X

USDJPY 8 hr-pattern
USDJPY 8 hr-pattern
USDJPY 8 hr-Pattern
USDJPY 8 hr-Pattern

GBPJPY
Considering a pattern in play on the pair; we are ideally looking for a test of 192.20-30 and a halt to consider going longs for a possible move heading right into 196 handle.

With USDJPY looking to hit higher notes against the USD after little pullbacks and GBPUSD on the other showing resilient and coming in stronger against most of the crosses; this could be an ideal setup to have a small retrace on GBPJPY for the new weekly candle and then continue with the rally higher.

Considering the swings it can perform and looking at the 4 hrs layout; a move towards 196.10-2X comes in as an ideal long position target and once done to it can consider shorting for a possible pull backs to 191.XX.

The 196.XX target comes in as the neckline of the bigger & better Inverse Head & Shoulder it is depicting and as evident on most instances; the neckline on initial attempts usually holds out.

GBPJPY 4 hrs - Inverse Head & Shoulder view with 196 target
GBPJPY 4 hrs – Inverse Head & Shoulder view with 196 target

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