3 pairs to watch – GBPJPY, EURAUD, USDBRL
Last week saw some volatile trade for this pair as it first threatened to break higher before attempting to break lower and then ending up little changed on the week. The narrowing of the range suggests a tight battle between longs and shorts with a breakout of 140.65 or 142.25 paving the way for a sustained move. After the strong move higher at the back end of last year and the steady decline seen from March until early June price is now awaiting a breakout before the next sustained move.
Possible support: 140.65, 139.28, 136.00
Possible resistance: 142.25, 143.54, 148.10
After two successive weekly declines the EURAUD managed to post a green weekly candle last time out and there are some signs that further gains may lie ahead. A trendline from the highs at the start of last year was broken out above at the start of May and a retest this week has attracted buyers back into the market. The coming sessions could prove pivotal for this pair with a move back above 1.4905 paving the way for a continuation of the rally seen over the past 3 months. Alternatively a break below 1.4625 would be seen as a bearish development and if price fails to hold above 1.4545 then there is a risk that the gains seen since the middle of February will be handed back.
Possible support: 1.4625, 1.4545, 1.4210
Possible resistance: 1.4905, 1.5190, 1.5595
After steadily trending lower since the start of 2016 this pair has shown some signs of recovery in recent weeks with the large spike higher in the middle of last month seeing a break and close above the falling trendline. The 5 weeks since this large green candle have all been inside that range, as the market has consolidated. Last week saw the highest weekly close of the year and there is some suggestion that further gains could lie ahead. A bull flag appears to be forming with a break to the upside providing the signal for further gains. However, note that the same formation formed in November and a failure led to several weeks of declines to the multi-year low.
Possible support: 3.2150, 3.0380, 2.907
Possible resistance: 3.3410, 3.4010, 3.4910