Let’s start of the week by looking at the 1-hour chart of the USDJPY! Check out the ascending triangle – pretty neat, right? The pair has been forming higher lows but has been bumping into a resistance level at 91.50. Would the upward momentum be strong enough to carry the pair above this level today? If it breaks 91.50, the pair could encounter another resistance level right around the psychologically significant 92.00 mark. But if the pair breaks below the bottom of the triangle, it could bounce upon hitting the psychological support at 91.00.
The USDCAD’s much needed bullish correction finally came last Friday as the pair bounced back up after finding support at 1.0600 – a few pips lower than the pair’s lowest price levels this year . From the chart I drew it might seem that the pair has been stuck in a range but I’d be careful in judging price action as range bound as the overall trend in the larger time frame is downwards. If the pair continues to retrace some of its steps, it might see some selling pressures somewhere around the falling trend line resistance and psychologically significant number at 1.0800. On the other hand, if the sellers take back control and jump back in trend, they could target 1.0600 once again.
Lastly, lets see what’s going on with Cable. Last Monday’s formation set the blueprint for the pair’s price action for the rest of the week. The pair rallied back to its 61.8% Fibonacci level after breaking down from a head and shoulders formation and falling to 1.6400. The price eventually fell and easily coasted past 1.6400 and 1.6300. It’s currently finding some minor support at 1.6200. We may see it fall further down to 1.6100 if this level does not hold. On the other hand, it may bounce back up to 1.6300 if it does.