Article originally published on innerfx.com and republished here with permission
Quote of the day: “How much easier it is to be critical than to be correct.” ~ Benjamin Disraeli
Good morning. Dollar, yen recovered and gold keeps setting more record highs as the world’s stock markets tumbled yesterday on growing economic concerns and more bad news from the eurozone. Let’s take a look at some charts and see what’s going on
The pair is still trading into a range and found resistance at $1.4500, now retreating towards trendline support in mid 1.42′s. Although it is not the best pair to look for trading opportunities, I think it’s best to sell on rallies or a break below this support zone – next target being 1.4050-1.4150
The recovery above 1.0450 didn’t last long as stocks declined and AUD followed. Anyway, it’s still performing quite well comparing to major stock indices and this move could be corrective, which means that it should rally hard if stocks recover. I’m more inclined to look for buying opportunities here, but will wait for stocks to show a decent sign of recovery first. Buying the Aussie dollar on potential break above 1.0450 is a plan I’m considering
Recent recovery was strong and it ain’t over yet. A break above this consolidation range / former support is likely, so it’s probably a good idea to buy on strength.
As we can see below, the euro is showing signs of exhaustion near resistance around 1.15. Most pairs are still holding surprisingly well against CHF these days, which means two things: 1. it’s the USDCHF that leads the pack and 2. SNB’s peg or no peg – people are afraid to jump into the water yet, therefore CHF not being too attractive these days. I think there’s more upside to be seen in the coming weeks against the CHF, so the 1st level where I’m looking for buying opportunities is 1.11 or a bit below.
This looks quite heavy and potential pullback will probably face strong resistance around former support zone at .8720. It’s worth keeping an eye on this support zone in the next trading sessions