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.)

7/23/2010 – Spot Gold – Price action on gold (a daily chart of which is shown) as of Friday (7/23/2010), continues to hover just above a long-term uptrend support line that extends at least all the way back to the October 2008 low.

This occurs after price pulled back to the trendline on Monday and has adhered to its dynamic support since then. As mentioned earlier this week, this is potentially a highly significant trendline touch, as this line has defined the bullish trend in gold for at least the past 21 months.

From a long-term perspective, therefore, price on gold is at a technically critical juncture. In the event that price is able to respect this trendline with a bounce, a key initial upside resistance target resides around the 1220-25 price zone, which would place price not too far off from the all-time high near 1265 established just around a month ago.

A clean downside break below the current long-term uptrend line, conversely, would be a significant bearish indication, with strong initial downside support in the 1160 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.)

7/22/2010 – EUR/USD – Price action on EUR/USD (a 4-hour chart of which is shown) as of Thursday (7/22/2010) has continued its climb after pulling back yesterday to just above 1.2700. As of Thursday morning New York session, price tentatively broke out above resistance at 1.2900 and could now potentially be targeting further upside.

Since the long-term low in early June, price action has displayed consistently higher lows and higher highs, and this uptrend accelerated after the late June low was hit. Within this past week, price attempted a break above the 1.3000 psychological figure, but could not muster the bullishness to stay above it. If another attempt at a 1.3000 breach takes place, key upside resistance on such a bullish move resides in the significant 1.3100 price region.

To the downside, if price is unable to stay afloat above 1.2900, key support continues to reside around the key 1.2700 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.)

7/21/2010 – AUD/USD – Price action on AUD/USD (a 4-hour chart of which is shown) as of Wednesday (7/21/2010) morning, has reached and turned down around the key 0.8850 price region, establishing a tentative triple top approximately matching the highs in June and earlier this month.

On establishing this tentative triple top, price has turned down, respecting resistance for the time being. This occurs after a bullish run that launched off the 0.8630 support region in the beginning of this week. At the current juncture, technical indications are hinting at overbought, but the key upside level to watch continues to be the 0.8850 level.

If price is subsequently able to breach that level significantly, bullishness should ensue that could potentially target key upside resistance around the important 0.9000 price region. In the event that this triple top high continues to be respected, and price drops to breakdown below the 0.8780 support region, bearish momentum could potentially target the noted 0.8630 support region to the downside once again.

(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.)

7/20/2010 – USD/JPY – Price action on USD/JPY (a 4-hour chart of which is shown) as of Tuesday (7/20/2010) morning, has formed a flag-like retracement/consolidation formation within a strong downtrend.

This potentially bearish retracement/consolidation pattern occurs right around the key 87.00 support/resistance region. In the event of a strong bearish break to the downside below this pattern, price could potentially target further key downside support in the 85.00 region.

In the opposite event of a significant upside breakout, which would invalidate the formation as a bearish pattern, key resistance continues to reside in the 88.00 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.)

7/19/2010 – EUR/GBP – Price action on EUR/GBP (a daily chart of which is shown) as of Monday (7/19/2010), has reflected the new week’s sharp downmove in GBP/USD and milder upmove in EUR/USD  by continuing last week’s bullish momentum that broke out above 0.8400.

By breaking out above the resistance confluence of the 0.8400 level combined with a key downtrend resistance line extending from mid-March, EUR/GBP has effectively broken a 4-month downtrend. Currently, a key upside resistance target on this breakout move resides in the 0.8600 price region.

If price is able to climb and breakout above that target, a further key resistance target immediately to the upside resides around the 0.8700 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.)

7/16/2010 – EUR/USD – Price action on EUR/USD (a daily chart of which is shown) as of Friday (7/16/2010) has reached up to hit a high slightly above 1.3000, establishing a new two-month high, before pulling back. The steep uptrend that began in early June and that has begun to accelerate into July has broken several key levels within the past few days and weeks.

After breaking out above 1.2500 and consolidating above that key level in early July, price action then went on to ascend at an even quicker pace to break out above 1.2700, and then 1.2900 just yesterday (7/15/2010). Currently, having just established a high slightly above 1.3000, EUR/USD looks potentially to be targeting further key upside resistance in the 1.3100 price region.

In the event of any significant breakout above 1.3100, which would be a considerably bullish indication, further potential upside momentum could possibly begin targeting the 1.3400 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.)

7/15/2010 – USD/JPY – Price action on USD/JPY (a 4-hour chart of which is shown), as of Thursday (7/15/2010), made a substantial plunge to break down below key support at 88.00 and now once again looks to be targeting further key support in the 87.00 price region.

This 87.00 level is also where price established a clear double-bottom low pattern earlier this month. By rising up above 89.00 after that double-bottom low, price fulfilled the pattern’s upside target. Soon after reaching that target, however, price established a double-top high above 89.00, and subsequently fell to its current position just above 87.00 once again.

In the event of a further breakdown below 87.00, the entrenched downtrend will have confirmed its continuation, with a further key downside support target in the 85.00 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.)

7/09/2010 – AUD/USD – Price action on AUD/USD, a 4-hour chart of which is shown, has reached and consolidated just under critical resistance around the key 0.8780 price region as of Friday (7/09/2010) morning.

This currency pair has been strongly bullish for this entire week after bouncing up from a double-bottom low in the 0.8315 price region. After that double-bottom was established and confirmed on a breakout above the double-bottom peak, price has continued its bullish stance up to the current 0.8780 resistance juncture.

In the event of a strong breakout above this resistance, an immediate further resistance target to the upside resides in the 0.8850 price region. A further upside target, in the event that 0.8850 is broken, resides around the key 0.9000 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.)

7/07/2010 – USD/CHF – Price action on USD/CHF, a 4-hour chart of which is shown, is quickly descending to approach strong support in the key 1.0500 price region as of Wednesday (7/07/2010), establishing a new 12-week low in the process.

As evident on the chart, this currency pair has given back virtually all of the substantial gains that it made from mid-April to early June. The almost symmetrical nature of the chart shows that the recent plummet from early June to now was as steep as the prior rise.

Most recently, a breakdown of an inverted pennant continuation pattern continued the steep downtrend. In the event of a strong breakdown below the noted key support around 1.0500, this pair could continue to give back this year’s gains, with the 1.0350 price region serving as a further support target to the downside.

(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.)

7/06/2010 – GBP/USD – Price action on GBP/USD, a 4-hour chart of which is shown, has been entrenched in a clear parallel uptrend channel since the early June low. Since that beginning of the bullish channel, price has made regular higher lows and higher highs, periodically breaking out above intra-channel downtrend resistance lines.

Currently, after bouncing off the 38.2% Fibonacci retracement of the latest bullish channel run, price has just tentatively broken out above the latest of these downtrend resistance lines, this one extending from the 9-week high hit late last week. After this trendline breakout, price has consolidated as of Tuesday (7/06/2010) morning.

In the event of a strong breakout above the noted 9-week high (in the 1.5225 price region), which would potentially continue the strong current uptrend, price could go on to target further key upside resistance in the 1.5350 price region.