There have been major Flag patterns brewing on the two FX indices for a number of a number of months now and it looks like these could be starting their breakout. Flag breakouts, if they evolve, have significant implications for a number of currency pairs and commodities but, perhaps, more so for Gold and Silver. Global stocks continue to rally in the wake of the Greek-debt deal and US stocks seem to be shrugging off concern about the stronger US$ and higher interest rates situation, for the time being that is.
USDX weekly: a Bull Flag breakout may be starting but we would need to see the weekly candle close above this trend line. Any bullish breakout would then bring the 100 level back into focus. There is a lot of US data to come on Friday and this may help to define whether a bullish weekly breakout evolves:
USDX 4hr: price is holding up and out from the triangle for now:
EURX weekly: the Bear Flag move may be starting here but a weekly candle close below the trend line and 96 support level needs to be seen to support this:
EURX 4hr: there has been a 4hr and daily candle close below the trend line and key 96 level:
S&P500 daily: price continues to move higher above the Cloud so watch for any new bullish Tenkan/Kijun cross:
Gold daily: the $1,145 level is under pressure. A weekly close below this level with ongoing US$ strength would suggest a move down to $1,000:
Silver daily: the $15 level is under pressure. A weekly close below this level with ongoing US$ strength would suggest a move down to $9:
Forex: there is a lot of US data scheduled for Friday: US Building Permits, CPI, Housing starts and Consumer sentiment. This data may help to determine whether the USD index achieves its Bull Flag breakout and, thus, whether the EURX then triggers a Bear Flag break. Weekly flag breakouts on these two indices have implications for a number of currency pairs that may shape new trend movements over the coming weeks.
E/U: this may be on the move as part of a major Bear Flag breakdown. Watch for any weekly candle close below the support trend line:
E/U weekly: watch for a weekly close below this tend line to suggest the start of a potential 3,500 pip Bear Flag:
E/U 4hr: it turns out my earlier E/U short signal was just a bit early….
E/J daily: a possible bearish H&S here is bringing the 134 level back into focus:
A/U 4hr: defying a bit of logic here and holding up well despite the stronger US$. For now that is!
A/U weekly: However, the continued hold below 0.755 does seem to support a major Bear Flag move worth up 1,700 pips:
Kiwi 4hr: this gave a new TC signal yesterday after my 7am candle close. The trading channel continues to support price action though:
U/J 4hr: this is back above the 124 level now. There has been a recent TC signal that I missed but the main technical play here has been the breakout from the daily triangle pattern. Price has rallied over 100 pips since that bullish breakout!
U/J weekly condensed:The 124 level is a major S/R zone for this pair and forms the upper region of a monthly chart ‘Cup’ pattern. Any hold above this 124 level may ultimately lead to a major move higher. However, if this does evolve, it’s then a matter of getting the timing right!
GBP/AUD 4hr: pulling back perhaps to test the monthly 200 EMA (green line)
GBP/AUD monthly: the 2.07 seems long gone and the monthly 200 EMA may be the level to watch now:
GBP/NZD 4hr: the triangle breakout spotted here this week has now given up to 750 pips! Price has stalled at a major monthly-chart bear trend line:
GBP/NZD monthly: note the bear trend line giving this pair some grief at the moment:
Loonie daily: this triangle move, also stalked here in the lead up to the breakout, has now given up to 450 pips. The major 1.30 level is proving some resistance:
Loonie monthly: this chart shows the relative importance of the 1.30 level. The monthly triangle breakout, stalked and monitored here for months now, has given up to 2,000 pips. Note the emergence of the ‘Cup’ pattern though. We could start to see some choppiness as these patterns can often develop a ‘Handle’ off to the side: