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.)

3/19/2010 – USD/CHF – Bullish price action on USD/CHF, a daily chart of which is shown, has made a tentative bullish bounce off the key 1.0500 support region.

This occurs after around a week of bearishness in the pair. The current bounce places USD/CHF on track to continue the uptrend that has been in place since the November 2009 lows below parity. Currently, strong dynamic upside resistance on this bounce resides around the long-term downtrend resistance line extending from the November 2008 high.

Any subsequent breakout above that trendline could target further upside resistance in the 1.1000 region. Key support within the context of the current uptrend continues to reside in the noted 1.0500 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.)

3/18/2010 – EUR/USD – Price action on EUR/USD, a daily chart of which is shown, has formed a rising wedge pattern within the context of an overall downtrend extending from the early December high.

This rising wedge occurs after price was once again rejected by 1.3800 resistance, and is a potentially bearish formation that is contingent upon a significant break to the downside. In the event of this strong bearish breakdown, which would lend strength to the robust prevailing downtrend, a key support target to the downside resides in the 1.3400 price region.

Any further breakdown below that level would lend confirmation to an overall downtrend continuation. To the upside, the noted 1.3800 price region should continue to serve as resistance within the context of the current downtrend.

(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.)

3/17/2010 – AUD/USD – Bullish price action on AUD/USD, a daily chart of which is shown, continues to follow a well-defined uptrend support line extending from the early February low.

In the process, price has just reached a new 8-week high. This strong medium-term uptrend places the key 0.9325 area resistance in clear and immediate focus. In the event of continued bullish momentum, right above the 0.9325 price region resides further major resistance in the 0.9400 region, which represents the 15-month high hit in mid-November 2009.

In the opposite event that price corrects substantially and breaks the current uptrend support line significantly to the downside, a key longer-term support target resides in the 0.8800 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.)

3/16/2010 – GOLD – Price action on spot gold, a daily chart of which is shown, has made a swift and pronounced bounce off a long-term uptrend support line.

This long-term trendline was falsely breached in early February, but has subsequently been respected since then. Most recently, price action descended back down to the trendline last week before making the pronounced bounce this week. On Tuesday (3/16/2010) in particular, price action on gold has made a strong bullish move, closely approaching resistance in the 1130 price region. Continued bullish momentum off this bounce could target further key upside resistance in the 1160 price region.

To the downside, the noted uptrend support line should provide dynamic support for the time being, with any subsequent breakdown of this trendline potentially targeting the 1070 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.)

3/15/2010 – GBP/USD – Bearish price action on GBP/USD, a daily chart of which is shown, as of Monday (3/15/2010) morning New York session, has erased much of the gains that the pair made late last week.

On Friday after having reached 1.5200 resistance, which represented the upper border of an inverted pennant formation that was broken to the downside earlier in the week, price was rejected at that level in the beginning of this trading week, and now potentially appears poised to continue its bearish momentum.

In the event of a continuation of the current bearishness, a key downside support target resides in the 1.4780 price region which represents the bottom of the noted pennant pattern and a 10-month low that was hit just two weeks ago.

Any further breakdown below that long-term low should confirm a continuation of the steep accelerated downtrend that has prevailed in this pair since the beginning of the year. Upside resistance within the context of this steep downtrend currently continues to reside in the noted 1.5200 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.)

3/12/2010 – USD/CAD – Bearish price action on USD/CAD, a daily chart of which is shown, has finally made a tentative breakdown below the key 1.0200 support level after respecting this level several times this week.

Friday’s (3/12/2010) breakdown of 1.0200 establishes a new 19-month low for this pair. The current bearishness puts USD/CAD on a potential path towards parity (1.0000), a level not reached since July 2008. The current bearish breakdown also lends confirmation to a potential continuation of the overall downtrend in the pair that has essentially prevailed for almost exactly a year.

With the 1.0000 price region being the key downside target as noted, upside resistance within the context of the continuing downtrend now resides around 1.0200 (where this level was previously support before breakdown). In the event that there is a re-break back above this level, further upside resistance resides in the key 1.0400 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.)

3/11/2010 – GOLD – Recent bearish price action on spot gold, a daily chart of which is shown, has prompted a correction back down to the long-term uptrend support line.

This bearish correction occurs right after price reached a high of around 1145 just last week. As of Thursday (3/11/2010) morning New York session, price is hovering right around the key trendline. In the event of continued bearish momentum that breaks down below this trendline (currently around the 1100 price region), price could target further downside support around the 1070 price region, potentially placing the current long-term uptrend at considerable risk.

In the event of any substantial upside bounce off the trendline, a major upside price target within the context of a potentially continuing uptrend resides around the noted 1145 high, and then 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.)

3/10/2010 – AUD/USD – Though technically still entrenched within a sideways consolidation, AUD/USD (a daily chart of which is shown) has displayed a marked bullishness since the early February low.

This bullishness has prompted the pair to rise above several key resistance levels to the point where the 15-month high just above 0.9400 is not far off. During the course of the bullish move from the February low, price has formed a well-defined uptrend support line. Currently, AUD/USD has just established a new 7-week high and appears poised to move yet higher.

With a potential upside resistance target in the noted 0.9400 price region, in the event of a bearish breakdown below the current uptrend support line, further downside support resides around the 0.8800 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.)

3/09/2010 – USD/CHF – Price action on USD/CHF, a daily chart of which is shown, has consolidated in a tight, slightly bearish consolidation right underneath a key long-term downtrend resistance line extending from the 2008/09/10 high hit in November 2008.

Since recently hitting this trendline in mid-February, price has bumped up against it several more times without breaking the dynamic resistance imposed by the line. Currently, since the lows around parity (1.0000) in early December, this pair has been entrenched in a medium-term uptrend. The key upside event to watch for within the context of this current uptrend would be a breakout above the noted long-term downtrend line.

In this event, a close upside resistance target resides around the key 1.1000 support/resistance price region. Downside support within the context of the current uptrend resides around the 1.0600 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.)

3/08/2010 – GBP/USD – Price action on GBP/USD, a daily chart of which is shown, has made a bullish correction since the beginning of March after having dipped well below the key 1.5000 psychological level on March 1st.

This bullish correction exists within the context of a steep accelerated downtrend in the pair. After having corrected up to approach the 1.5200 price region, the directional bias continues to be bearish in line with the strong current downtrend. The key price level to watch to the downside continues to be the important 1.5000 area, which was respected late last week.

With any strong breakdown of the current bullish correction that goes on to re-break down below the noted 1.5000 price region could potentially carry the bearish momentum to target further major support in the 1.4500 support/resistance price region. To the upside, in the event that the current bullish correction continues, the 1.5350 price region should continue to serve as strong resistance within the context of the current accelerated downtrend.