AUD/USD: Possible low reached
The down-trend remains strong but there is a possibility the pair may have reached a low. If today ends on a high in the shape of a hammer candlestick this will be a very bullish sign, and all the more because it will be resting on the lower border line of a falling expanding wedge or broadening formation. Situated at the lows it signifies the possibility of a reversal from down to up-trend. We may well get a rebound higher, back up to 0.9050, with confirmation coming from a break above the 0.8969 level. Alternatively the dominant down-trend is still essentially intact and will probably fall if we get confirmation from a break below the 0.8875 lows, leading to a move lower to the 0.8795 support ridge.
EUR/USD: Stronger signs of reversal
There appears to be a broadening formation at the highs. This is a reversal pattern and it is a sign the short-term up-trend could be finishing. A break below the key 1.3164 lows would establish the beginning of peak and trough down and give confirmation of a probable bearish move to about support at 1.3100 and then 1.3025 eventually. With Non-Farm Payrolls expected to surprise to the upside this enhances the bearish outlook – although isn't a technical observation. Of course we could get another up-leg unwind within the pattern as price is currently resting on the lower border, and this might target perhaps 1.3390. Ultimately, however, the presence of the broadening formation tilts the outlook to favouring further down-side, although a decisive break out of the pattern is required for confirmation.
GBP/USD: Meeting trend-line resistance
The short-term trend is down, although currently the pair has corrected back into the trend-line for the move down as well as a old trend-line from the previous up-trend. This collection of resistance will probably hold and and from here the pair will probably move lower, first to the range lows at 1.5100 and then if these are broken probably to 1.5000-1.4985. There are already strong reversal candlesticks at the highs increasing the chances of a breakdown. The S3 weekly pivot at the 1.5100 lows, however, indicates an oversold state complicating the analysis. The longer-term trend is down, supporting the bearish outlook, however, currently we are in a long-term consolidation on the monthly chart. The possibility of a recovery and a break back up above the trend-lines cannot be discounted with a re-break of the 1.5175 confirming a move up to 1.5250.
Analysis By: Joaquin Monfort, Forex4you Analyst
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