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Midweek Round up

The first half of the week saw GBPJPY broke above Week 15′s high, and added fuel to support the inverted H&S formation. However, GBPJPY could not break out of the inverted H&S neckline and the daily equidistant channel. As a result, we saw a Bull Trap at the top of the trading range. Price was pushed to Week 15′s low and found a support level. Thereafter it rebounded and have reached an indecision point.

Rest of Week’s Outlook

In the weekly chart, GBPJPY broke the descending trendline, hinting that the current downtrend may be over. The previous weekly candle closed above the trendline and the current weekly candle is currently doing a throwback to the trendline. In order for the trendline break to be effective, the GBPJPY weekly candle must close above the trendline.

In the daily chart, we see GPBJPY moving in a equidistant channel, and hit the top of the channel at the start of the week.

In the four-hourly chart, we are at an indecision point as there are two possible scenarios that can unfold. Scenario 1 (bullish) will see GPBJPY being supported by the ascending trendline and/or Week 15′s low and make a dash towards the top of the channel. Scenario 2 (bearish) will see GBPJPY breaking below the support and head south towards Week 14′s low.

Conclusion

GBPJPY is currently trapped within a tight trading range due to the several levels of support and resistance. Given the indecision shown by GBPJPY, it is important to protect one’s downside risk by entering with a tight stop loss.

Bull trap in GBPJPY

Daily chart prints potential triple top

4-hour chart anywhere can go

The Weekly Chart of Aussie is gaining more signals for a possible Bearish Move.

Below are the reasons for the Bearish View.

1. Last week, Aussie was resisted by 2009 High.

2. A possible Dark Cloud Cover formed on past 2 weeks.

3. A possible Triple Top Chart Pattern forming.

Weekly Chart of AUDUSD

Zoom into Daily Chart, the bullish trendline is being shifted to a gentler slope, suggesting a possible loss of bullish momentum.

Adding on to the Bearish View, the recent Price Action seems to suggest a rejection of March High.

However, there is a possible bullish support at the trendline near 0.9190 region. This may cause Price to retrace up.

Daily Chart of AUDUSD

Thus, on the 4 hourly chart, it will be good for Price to retrace up to attract the Bears who missed the initial down swing.

4 Hourly Chart of AUDUSD

As from the 4 hourly chart above, the Bears will have to contend the monthly trendline (red) in order to break out of the current Bull rally.

The recent 4-hourly chart of EURUSD and USDCHF shows that both currencies are negatively correlated.

We posted yesterday on EURUSD having a possible triple bottom formation. It is observed that USDCHF made a triple top.

Thus, it is worthwhile to analyze these 2 pairs together for your trades.

EURUSD having triple bottom

USDCHF forming triple top