Article originally published on innerfx.com and republished here with permission
Quote of the day: “Doing a thing well is often a waste of time.” ~ Robert Byrne
Good morning. It’s been a good Monday for the euro and risk sensitive instruments as the recovery continued – EURUSD reaching a daily high near $1.4500 before pulling back, AUDUSD breaking resistance – former support – at 1.0450 and AUDJPY returning above 80. The Swiss franc weakened against most counter parts but is currently getting a bid, though the move could be a correction, which is normal, after last week’s impressive decline. Let’s take a look at some charts to see if there’s anything interesting going on:
Euro rallied yesterday towards 1.45 where it found temporary resistance, anyway it is still in range and will probably have a hard time advancing much further due to debt contagion and fears in the Eurozone. Selling around recent top sides is probably the best thing to do in the next days
AUDUSD – price is pulling back to retest support around 1.0450, so this could be a good buying opportunity as the recovery is likely to continue
The horizontal top side around 1.2600 is under pressure since the end of July. Even though the weekly charts still look very bearish, maybe it’s time for a larger correction to the upside (see weekly chart below)
and the weekly chart – notice the rising trendline connecting lows since 2009. The plan here is to look for a buying opportunity if the recovery continues above 1.26 or a short entry if trendline support will be breached.
yesterday’s recovery brings recent top side in focus as no reversal signs are seen yet, but it’s worth monitoring these levels. As seen in the last couple of weeks, gains have been short-lived
Yesterday’s candle suggests that a temporary bottom is formed at the trendline support, so it’s probably time to expect a corrective move towards the 100 handle, where new selling is likely. However, it’s also worth keeping an eye on the trendline support, just in case yesterday’s candle is a false signal and the trendline will be breached in the next sessions.
The US dollar had a good run against the Canadian dollar since it found support at 94 cents. We have a triangle formation formed this month, and it’s time to exit soon.