Chart Of The Day

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

9/02/2010 – USD/CAD – Price action on USD/CAD (a 4-hour chart of which is shown) as of Thursday (9/02/2010) has settled above 1.0470 support once again after having just descended from a key resistance re-test in the 1.0670 price region, which formed a double-top high.

This all occurs within the context of a short-term parallel uptrend channel extending from the early August low, and after price action broke out above a key downtrend resistance line extending back to the May high.  In the event of a pronounced bounce off the current 1.0470 area support, price could once again target the key 1.0670 resistance region.

In the event of a strong breakdown below the current support, immediate dynamic support can be found at the bottom border of the current parallel uptrend channel. Further downside support resides around the key 1.0300 price region.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/31/2010 – GBP/USD – Price action on GBP/USD (a 4-hour chart of which is shown) as of Tuesday (8/31/2010) has dropped to approach support in the 1.5350 price region. This occurs within the context of a relatively choppy descent from the 6-month high just under 1.6000 reached in early August.

This descent has formed a clear downtrend resistance line extending back to the mid-August high. In the event of a strong breakdown below the noted 1.5350 support, a continuation of the new downtrend will have been confirmed, with a key downside support target in the 1.5200 price region.

Dynamic upside resistance within the context of the current downtrend continues to reside around the noted downtrend resistance line.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/30/2010 – GBP/JPY – Price action on GBP/JPY (a daily chart of which is shown) as of Monday (8/30/2010) has pulled back up to the lower border of the large rising wedge formation that it broke down last week, before reasserting its bearish stance today.

The low that was reached on the wedge breakdown before pullback was in the 128.75 price region, around a 3-month low for the pair. This occurs within the context of a long-term parallel downtrend channel extending back to the August 2009 high. In the event that price furthers its bearish trend momentum to break below the 128.75 low, a key downside support target resides around the long-term 126.70 low just hit in May.

Any strong breakdown below that level would confirm a downtrend continuation. In terms of key long-term technical support in the event of a breakdown below that level, price would not be too far off from the all-time low at 118.80 hit in January 2009.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/27/2010 – EUR/USD – Price action on EUR/USD (a 4-hour chart of which is shown) as of Friday (8/27/2010) has begun once again to lean towards a resumption of the bearish trend that originated in early August.

This occurs after price hit a low just below 1.2600 earlier in the week and then made a bullish retracement, forming a corrective pattern with flag-like properties that could potentially indicate further bearishness ahead if this continuation pattern is broken significantly to the downside.

In the event of this significant breakdown, price action could begin to target key downside support in the 1.2500 price region.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/26/2010 – AUD/JPY – Price action on AUD/JPY (a daily chart of which is shown) as of Thursday (8/26/2010) has formed a large and clear triangle consolidation pattern bisected by a key support/resistance level at 76.00. 

This occurs after three weeks of general bearishness that dropped price down from the very top of the triangle to its current position near the very bottom of the triangle and under the noted 76.00 price level. In the event of a significant breakdown below the lower border of the triangle formation, an immediate downside support target resides in the 72.00 price region, which is just above the bottom point of the triangle.

A further downside support target in the event of continued bearish momentum can be found around 70.50, followed by the 68.00 price region.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/25/2010 – GBP/USD – Price action on GBP/USD (a daily chart of which is shown) as of Wednesday (8/25/2010) has hesitated after approaching key 1.5350 region support on the heels of almost three weeks of bearish price action that broke down below a key uptrend support line and just established a new one-month low for the pair.

This strong support area coincides approximately with a 38.2% Fibonacci retracement level of the bullish trend run from the long-term low just above 1.42 to the high near 1.60. Currently, GBP/USD continues to carry a bearish bias.

In the event of a strong breakdown below this 1.5350 area support confluence on continued bearish momentum, price action could target further downside support in the 1.5120 price region, which also coincides approximately with a 50% Fibonacci retracement of the noted bullish trend run.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/24/2010 – AUD/USD – Price action on AUD/USD (a 4-hour chart of which is shown) as of Tuesday (8/24/2010) has tentatively dropped below 0.8850 support to establish a new one-month low, before correcting back up.

This occurs after price came down from another re-test of the top of a new parallel downtrend channel extending from the early August 0.9220 peak. Having reached a low today just below 0.8800 and potentially confirming a downtrend continuation, any re-break below this level should target key further support in the 0.8700 price region.

And any breakdown below that level could potentially target yet further downside support in the 0.8550 support/resistance price region. Dynamic upside resistance within the context of the strong current downtrend continues to reside around the top of the noted parallel downtrend channel.

(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/23/2010 – USD/JPY – Price action on USD/JPY (a 4-hour chart of which is shown) as of Monday (8/23/2010) has once again respected the strong accelerated downtrend represented by the key downtrend resistance line extending from the early June high.

Although the end of last week saw price rise to approach this trendline once again, the current trading week has begun with significant bearishness and with price action once again dropping to approach the 84.70 long-term (15-year) low hit just around two weeks ago. In the event of a breakdown below this long-term low, the 83.50 price region could serve as a significant downside support target, as it is a 138.2% Fibonacci extension of the last major bearish run.

Any further breakdown below that level could potentially see price approach the 79.75 all-time low that was established way back in 1995. Dynamic upside resistance on the current bearishness continues to reside tentatively around the reliable downtrend resistance line extending back to early June.

 (Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/12/2010 – GBP/USD – Price action on GBP/USD (a 4-hour chart of which is shown) as of Thursday (8/12/2010) has continued this week’s precipitous drop from 1.6000 resistance and has approached key support in the 1.5550 price region once again, establishing close to a two-week low.

This also places the pair near the bottom of an uptrend channel extending from the May lows. In the event of a breakdown below both this uptrend channel and the noted 1.5550 support, a further downside support target resides in the 1.5350 price region, which is a previous key support/resistance level.

 (Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)

8/11/2010 – EUR/USD – Price action on EUR/USD (a 4-hour chart of which is shown) as of Wednesday (8/11/2010) has dramatically furthered its fall after this week’s bearish breakdown of the uptrend channel that has been in place since late June.

In the process, price has established a new 2+ week low. After breaking down below the noted parallel uptrend channel, price action briefly retraced back up to the channel’s lower border on news, but then plunged soon after and broke down below several key support levels. With its break below the key psychological 1.3000 level, the bearish bias on this week’s trend change has been confirmed.

A key downside support target on this breakdown and bearish follow-through momentum resides in the 1.2700 price region. A breakdown below that support level would potentially confirm a trend reversal back to the downside.