Chart of the Day – July 23, 2009

EURUSD

PoD Chart

Looks like the EURUSD hourly chart is forming another flag pattern! Flag patterns are usually formed when there is consolidation after an extended move upwards (or downwards). Notice how price action of the EURUSD just stayed within a tight range after a strong rise. It is now currently trading between the 1.4150 and 1.4250 price regions. If price breaks out upwards, its next likely resistance would be this year’s high, at 1.4339. Conversely, if price pierces through 1.4250 and heads south side, 1.4000 would most likely serve as support as this is both a psychological and technical level.

AUDUSD

PoD Chart

After breaking out of the channel earlier this week, the AUDUSD pair has been trading within a tight 100 pip range. It appears that buyers who brought the pair up from 0.7700 to the current area just below 0.8200 have lost some steam. Is this merely a pause before the pair continues to shoot higher? Or will sellers try to bring price action to the downside? Watch out for any potential break outs above 0.8200. Keep note that the yearly high is at 0.8265 so there could be potential resistance around that area. If price breaks out below 0.8100, there could be support at 0.8000 a psychological significant area.

NZDUSD

PoD Chart

A 60-minute chart of NZD/USD is painted above. The NZD/USD pair has been trading on an uptrend since July 13. The pair, however, consolidated within a tight range for the most part of this week. Though, yesterday we saw the pair broke out from the ‘box.’ Currently, the price is trading just above the resistance-turned-support. Chances are the pair may continue to head higher since the uptrend is still intact. Yet, it may drop until the original support of the range or at the 0.6500 mark if the the price closes below this support-turned-resistance.