The Dow appears to be more ‘resisted’ than supported. A bullish situations hangs on the a few potential ‘ideas’ for support as well as the 200-day ema.

DJI faces many resistances; bearish reversal

GBPUSD prints likely continuation for short. This is despite it near to more resistance of March 2010 and mid-July 2010. This level might be a potential support.

GBPUSD display continuation for short

EURJPY prints a descending triangle or bearish pennant depending on how one looks at it. I see the shape of a shoe. Anyhow, the lower highs hint of a continuation move.

Descending triangle for EURJPY

So despite a bullish close in Week 32 for USDJPY, this week is just so negative. What’s worse, it just gets resisted lower and lower. 84.70 could be threatened.

Week 33 for USDJPY bearish despite good close in Week 32

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The Loonie (USDCAD) is on a downtrend since 2009 and it does not seems to have any attempt to reverse this trend as of now.

Weekly Chart of USDCAD

As from the Weekly Chart above, the Loonie is making its way near to 2009 support and it is also near to multi-week support zone now. Since late Sep 2009 till now, the Loonie has been on a trading range, which could be a consolidation of the downtrend.

How to take this advantage?

4 Hourly Chart of USDCAD

On the 4 hourly chart, it seems that Loonie is forming a pennant-like chart pattern, which could hint a possible trend continuation.

This pattern will be valid as long as the top trendline of the pennant is not violated.

On the other hand, a bullish view on the Loonie could regard the pennant-like pattern to be a symmetrical triangle for a counter-trend move.

Therefore, it will be better to wait for a clear picture for Loonie to unfold before attempt for a trade.

The Swissy did a throwback on the day chart. From the hourly chart, it is clearly expanding after base building. Are dollar gains here to stay? DX chart from Ino.com. The USDJPY is making similar move.

Throwback in Swissy after breakout from downtrend

Beautiful base building in hourly chart

Dollar gains visible in DX

Throwback move is also mirrored in USDJPY while a wedge formation reinforces the view of a possible continuation move.

Throwback and wedge reinforces USDJPY continuation

The CADJPY displays a formation that looks remarkably like a pennant. This is because of the ‘flagpole’ which tells us the strong upward momentum in its previous rally. This flagpole and subsequent side-way movements suggests a continuation action after profit-takers have been cleared and strong bulls take command.

Possible pennant in CADJPY

On the other hand, price remains resisted by an August 2009 level so upside is restricted until this level is breached successful.

Equidistant channel in 4 hour chart of CADJPY

In the 4-hour chart, an equidistant channel can be seen. The resistance of this channel is the resistance of this possible pennant formation.

It is difficult to figure where the Euro is going. An inspection of the daily and 4-hour charts reveal 2 possible scenarios.

Bearish flag

The daily charts  suggest that the Euro may continue its downward move because of this continuation pattern. The flag is characterized by the flagpole and which suggests a lot of momentum. A body of the flag completes the pattern. This body is usually perpendicular to pole. A body that converges into a triangle is called the pennant.

For the flag to be valid, price remains within the resistance and support of the flag. It is ultimately confirmed when it moves downward and breaks the support level (see dotted line motion).

Daily charts print a possible bearish flag

Reversal

The 4-hour charts paint a slightly different picture that can be visualized as a bullish reversal. The Euro was range bound the past 2 weeks (last week of 2009 and first week of 2010). This week price made an upside movethat was higher that last weeks high. Action till now seems to suggest that a support has been formed. If the bullish picture is true, price will find a base and penetrate Monday’s high level. Otherwise, the downside move below support will support the bearish flag scenario.

Weekly high