Charts of the week: AUD/JPY & GBP/USD move to critical levels, extensions likely

Ross J Burland FXStreet

As we head into the closing trading days of the year, two charts have stood out the most – AUD/JPY & GBP/USD. However, holiday lull likely means consolidation and profit-taking.

AUD/JPY bulls targetting 76.50 ahead of 77.50

Broken the weekly down channel resistance.
Supported by the 21 200-week moving average.
Weekly RSI/Stock and MACD have upside.
Next upside targets can be located at 76.34/50 and 77.54.

Supported by the 21 200-week moving average, AUD/JPY has been grinding its way higher within an ascending wedge pattern as traders buy the dip on positive fundamentals. The price action ended last week technically bullish with momentum indicators in positive territories with plenty of upsides yet to go on the longer-term time frames, such as the daily and weekly charts – Weekly RSI/Stock and MACD have upside.

Bulls extended the Thursday close above the 200-day moving average on Friday making for three days of consecutive higher highs and lows. The December low so far has been higher than the November and October lows, bullishly reinforced by a higher December high versus the November high and price action paints a bullish bias. The move has also broken the weekly down channel resistance. While liquidity in thin out there, outside of a surprise geopolitical trigger, it is highly unlikely that we will see additional moves unlit after the holiday lull. However, the next upside targets can be located at 76.34/50 and 77.54.

GBP/USD bears seeking critical support down at Nov 7th lows

GBP/USD testing the 200 4-hour moving average.
GBP/USD closes below a key support at 1.3011.
Bears eye a 38.2% Fibo retracement confluence target (50-DMA) around 1.2920.
The 7th Nov lows are located at 1.2768 ahead of 50% Fibo around 1.2740.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD flat lines around mid-1.3300s amid Iran tensions

The GBP/USD pair struggles to capitalize on last week's strong move higher and oscillates in a narrow band, around the 1.3350 area during the Asian session on Monday. Moreover, spot prices remain below a technically significant 200-day Simple Moving Average, warranting caution before positioning for an extension of the recent recovery from the 1.3140 zone, or the year-to-date low touched in June.

EUR/USD: 20-day EMA acts as key barrier near 1.1460

The EUR/USD pair trades marginally lower to near 1.1428 during the early European trading session. The major currency pair faces slight selling pressure as the US Dollar gains ground after a negative weekly close. In the late Asian trade, the US Dollar Index trades 0.1% higher to near 101.00.

Gold struggles to find acceptance above $4,200; eases from two-week high

Gold struggles to capitalize on its modest Asian session uptick, and trades below a fresh two-week high, levels just above the $4,200 mark. The US Dollar attracts some safe-haven flows amid uncertainties stemming from tensions in the Strait of Hormuz, and acts as a headwind for the bullion. However, receding bets for rate hikes by the US Federal Reserve hold back USD bulls from placing aggressive bets.

Cardano Price Forecast: Bullish momentum persists as traders stay cautiously optimistic

Cardano (ADA) is trading slightly lower on Monday, finding support around the key technical level at $0.186. ADA pauses its gains at the start of this week after posting a massive 31% rally in the previous week. Despite the pullback, derivatives data suggests traders remain cautiously optimistic, while momentum indicators indicate that the uptrend remains intact if ADA holds the key support zone.

Why central banks are loading up on Gold during the current 30% correction

Gold has crashed from $5,500 to $4,000 in five months, marking a decline of almost 30% that has triggered widespread retail panic. However, this correction could present a significant opportunity, driven by an unprecedented market indicator: central bankers and the world's largest asset managers are aggressively buying.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.