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Daily FX: Technical Corner

Christopher Vecchio

EUR/USD: The stall at the confluence of resistance at 1.2800/30 (20-EMA, 50-EMA, 100-DMA, last week’s high, mid-October swing low) gave way, coupled with a breakout of the daily RSI above 50. Now, the pair looks bullish again in the near-term. Support comes in at 1.2800/30 and 1.2740/45(weekly low). Resistance is, 1.2880/1.2900 (breaking now), and 1.3015/20 (late-October high).


USD/JPY: On Tuesday I said: “With 81.75 broken, the next levels to like higher are the late-March highs at 83.20/35. As noted yesterday, however, with the daily RSI overbought once more, the next corrective leg may be around the corner.” Indeed, after a Doji / Shooting Star candle on Wednesday coupled with further downside today, the USD/JPY is working on a potential Evening Star candle cluster (as noted on the chart above), which is a bearish reversal pattern. Coinciding with this is the daily RSI starting to contract from its already-overbought levels. Support comes in at 81.75, 81.15, and 80.50/70 (former November high). Resistance is 82.90/83.00 and 83.30/55.


GBP/USD: No change: “The downtrend that’s been in place for the past two months remains, though the GBPUSD finds itself holding both its 100-DMA and 200-DMA on recent declines, suggesting the medium-term trend is to the upside. Resistance comes in at 1.5950/55 (20-EMA), 1.5970/75 (50-EMA) and 1.6170/80 (late-October highs). Support is 1.5890/95 (100-DMA), 1.5850/55 (200-DMA), and 1.5800/05.”


AUD/USD: More range-bound price action as the AUD/USD is wedged between rising trendline support and stubborn quarterly highs just below 1.0500. Accordingly, my levels remain unchanged. Support is at 1.0350/60 (trendline support off of the June 1 and October 23 lows) and 1.0235/80. Resistance is at 1.0405/50 (former swing highs and lows), 1.0475/80 (November high) and 1.0500/15.

S&P 500: No change: “The key support noted for the past several weeks at 1350/65 has held. Although this is a broad zone, with multiple points of inflection occurring in this area, we know it will be an area in which buyers and sellers are looking at the market. If this breakdown is legitimate, then a healthy corrective rebound back towards 1380/85, 1400, and even 1420 could be possible. Support comes in at 1350/65 (monthly S2, ascending channel support off of November 2011 and June 2012 lows). Resistance comes in at 1383 (200-DMA) and 1400/10 (20-EMA, 50-EMA, 100-EMA).” It’s worth noting that the S&P 500 found support at the 61.8% Fibonacci on the June 2012 low to the September 2012 high at 1345; this suggests the overall uptrend may be intact.

GOLD: Nothing has changed over the past four weeks, so neither has my bias: “Gold has consolidated just below its November highs, though considering that the U.S. Dollar is at its strongest level in over two months, Gold is holding up well. As such, I still expect the 1700 area to be defended vigorously, and look to get long as low as 1675. Resistance is 1735, 1755/58 and 1785/1805. Support is 1700, 1685/90 (100-DMA, November low), and 1660/65 (200-DMA).”

S&P 500 Daily FX
Gold Daily FX