FX technicals: GBP/USD remains in a steep uptrend
James Chen October 10, 2013 3:01 PM
<p>EUR/USD EUR/USD (daily chart) has been entrenched in a strong bullish trend since the 1.2750 support level was hit with a double-bottom retest in early […]</p>
EUR/USD (daily chart) has been entrenched in a strong bullish trend since the 1.2750 support level was hit with a double-bottom retest in early July. After hitting a high of 1.3450 in August, the price pulled back around 50% of its prior bullish run and rebounded strongly to reach for even higher highs. The pair then consolidated in a tight pennant pattern around the key 1.3500 psychological level in September, before breaking out to the upside to target the major 1.3700 resistance level. This 1.3700 high was last reached in February, where it formed the ‘head’ of an eventual head-and-shoulders pattern that later broke down to reverse the previous uptrend. Currently in somewhat of a consolidation pattern just above 1.3500 support and below 1.3700 resistance, the trend for EUR/USD remains bullish. The key upside level to watch continues to be the noted 1.3700 level, a breakout above which should reach towards the 1.4000 target. Downside support on any subsequent pullback tentatively resides around the 1.3400 level.
GBP/USD (daily chart) continues to move within a steep uptrend that extends back to July’s double-bottom retest just above the 1.4800 support level. Since that low, the pair has continued breaking successively higher resistance levels to the point where it is has recently approached major resistance around 1.6300, which was reached and respected at least three times within the last year and a half. Just 40 pips shy of this 1.6300 level, however, the price pulled back down to the 1.6000 level once again. Currently fluctuating around this 1.6000 level, GBP/USD remains within a steep uptrend for the time being. If the pair can carry the continued bullish momentum to break out above the noted 1.6300 level, the key resistance objective to the upside resides around the 1.6500 level. To the downside, if the uptrend line currently below 1.6000 is broken strongly to the downside, thereby breaking or interrupting the steep uptrend, key support lies at the 1.5750 level.
USD/JPY (daily chart) has been in a prolonged sideways consolidation since the long-term high of 103.72 was reached in May. More recently, after the failed attempt at breaking above the key 100.00 level in early September, the pair has declined gradually in a falling wedge pattern. In the process of this decline, the price has dipped under both the 50-day and 200-day moving averages, which it has not done since November 2012, right around when the major bullish trend began. Having hit 97.00 support, a further decline could reach down further towards the 95.00 support. The major event to watch for, however, would be a breakout above the falling wedge pattern, and subsequently above the two noted moving averages. In that event the pair should potentially reach back up towards 100.00 and 103.00.
AUD/USD (daily chart) has been rising in a partial recovery after having made a potential trend reversal to the upside in July, August, and September with an inverted head-and-shoulders pattern. The neckline of this pattern was broken to the upside in early September, and the price subsequently reached up to a high of 0.9527 before pulling back in a steep falling wedge pattern. The pair then broke out above that pattern to resurface above the 0.9400 level. Further upside momentum on this breakout could move the pair towards upside resistance objectives around 0.9650 and 0.9850.
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