After trading in an ascending channel for over a week, the AUDUSD did a kangaroo jump to break the channel and establish a new yearly high at .8339. It then promptly dropped, and has continued to fall the past couple of days. It seemed like the .8200 was going to hold as a strong psychological support area, but price has already broken through it. Could this signal the end of the strong uptrend the past few weeks? Or is this merely a pullback? If price bounces back up, it may have trouble breaking past the .8200 price level, which may be a support turned resistance price area. It also lines up closely with the .382 Fibonacci level. There could be further resistance at .8250, which is just below the previous yearly high and is also just below the .618 Fibonacci level.
Just an update from yesterday’s USD/JPY chart art… The pair did bounce off from the bottom of the ascending channel although it didn’t come completely in contact with the support level. Now the pair is making its way back up to the top of the channel with the stochasticoscillator following suit. The stochastic is nearly in the overbought area, at which point the price movement could reverse and slide back down. The pair has already tested the top of the channel for four times and is currently making its fifth attempt to pierce through. It might have difficulty breaking above the psychologically significant 96.00 resistance level but if it does, price action could head all the way up. But if the resistance levels prove too strong for the pair, it could find support at the 95.00 mark and at the bottom of the channel on its descent.
The GBP/USD pair is back in consolidation mode as can be seen in its 60-minute chart above. The price is currently trading just above the range’s support at around 1.6350. This level has held several times before so price could just bounce back up again. If this happens, it faces potential resistance at 1.6500 and more importantly at the resistance at the top of the range. A break at the top of the range could take the pair all the way up to 1.6600 and 1.6700 respectively. On the flip side, if the pair breaks below the range, there’s immediate support at 1.6300 to keep the price afloat. Otherwise, it may see itself all the way down to 1.6200.