Some very interesting patterns are emerging in FX majors this week. We are going to highlight the formations with target levels and prime entry. First, a look at the USD index
Daily: Still pushing higher. A full AB=CD formation would take the pair to the channel top at 99.75.
Intraday (six-hours): The mild dip lower was bought into and we closed near the weekly highs. The interesting fact here is that the 261.8% extension level (94.06-96.26) is located at 99.82, just above the AB=CD formation target. Next upside barrier (or target) is the triangle measured move at 98.44.
Intraday (four-hours): Broken out of the triangle formation to the downside. The measured move target is at 1.0880. Bespoke resistance and prime short entry at the start of the week is located at 1.0997.
Intraday (one-hour): Not the favoured USD pair (as we are bearish on EURGBP). Holding within a consolidating triangle formation. A break of support at 1.2171 should see a move down towards previous support at 1.2100.
Intraday (two-hours): We have broken out of the channel formation to the downside. A break of 0.8966 should see a move down towards the 261.8% extension level (from 0.9141-08966) of 0.8682 this week. We have bespoke support at 0.8630 but this could well move higher to link-in with aforementioned Fibonacci.
Intraday (two-hours): One to break the bullish dollar bias. Looks to be forming an Ending Wedge pattern. At the moment we have a lower high but really need to see a break of support at 0.9880-52 to confirm the move to the downside. We would then look to target 0.9821-27 and 0.9767. There is even scope for a move to 0.9732, depending on which wedge formation plays out.
Intraday (four-hours): A bearish Outside Bar on the four-hour chart highlights a possible top in place for USDJPY. With the intraday rally also rejected on Friday we could be forming a bearish Head and Shoulders. Bespoke support is close to the neckline at 103.51-45, so this could be a formidable barrier. A break there and we look to 102.15 (measured move) this week.
Intraday (four-hours): The weekly Ichimoku Cloud capped buying last week and we broke out of the wedge formation to the downside. The measured move target is at 1.3000. A break there and we could get a move towards the 261.8% extension level at 1.2858. Prime short entry would be a retest of the breakout at 1.3180 with a stop above bespoke resistance at 1.3200.
Intraday (four-hours): Volatile trading towards the end of the week. However, we did see a wedge breakout and, although selling was noted late on Friday, we look for dips to be bought. Bespoke support is located at 0.7580. With a stop placed back inside the wedge pattern (say at 0.7555) and a target level at 0.7690 (wedge target) this offers a good risk/reward set up in early trade this week.
Intraday (four-hours): Thursday and Friday saw a period of consolidation with the daily chart posting little net change. This in turn formed a consolidating channel formation on the intraday chart. An AB=CD formation is seen at 112.89, close to the 78.6% pullback level of 112.96. This is the target area in early trade this week. Bespoke resistance is seen at 114.46.
Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more
— Edited by Susan McDonald
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Non-independent investment research disclaimer applies. Read more