In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the weekly charts heading into March trade. Review this week’s Strategy Webinar[1] for an in-depth breakdown of these setups and more.
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USD/CHF Weekly Price Chart
Notes: The Swiss Franc[3] has continued to trade within the confines of a well-defined descending pitchfork formation[4] extending off the 2015 high with the January decline taking prices below basic trendline support extending off the 2011 low. Last week saw prices rebound off the August 2015 low / 50-line of this slope with the subsequent advance testing resistance at the median-line. Key near-term resistance stands at 9444/73 with a break below 9258 needed to mark resumption of the downtrend- such a scenario would have us eyeing subsequent Fibonacci support at the 9092-9123 backed closely by the lower median-line parallel.
Bottom Line: The immediate focus is on a break of the 9258-9473 range for guidance with the risk weighted to the downside while below confluence resistance. From a trading standpoint, I’ll favor fading strength while below monthly open resistance at 9445, but ultimately we’ll need to validate a break of this near-term range to offer conviction.
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AUD/USD Weekly Price Chart
Notes: Aussie has been trading within the confines of these ascending parallels[6] extending off the 2016 low with the recent decline taking prices into confluence support here around 7735/50- a region defined by the 52-week moving average and the 2017 March high. Key support and bullish invalidation rests lower at 7636/37 where the 38.2% & 61.8% retracements converges on slope support (area of interest for possible exhaustion / long-entries IF reached). Weekly resistance remains steady at 8125/68 with a breach / close above this region needed to mark resumption of the broader uptrend.
Bottom line: The immediate focus is on this support confluence- I’ll be looking for a possible exhaustion low early this week OR on a move into 7630s. Look for a rally through the 200-week moving average / yearly open at 7800 to alleviate further downside pressure near-term.
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AUD/JPY Weekly Price Chart
Notes: AUD/JPY broke below confluence support at 84.25 last month with the decline now testing a critical inflection zone to start the week at 81.58. The decline has held within the confines of a descending pitchfork formation extending off the 2017 highs with the sell-off now testing those yearly lows. Initial resistance stands with the median-line (currently ~83.20s) backed by 84.25 with bearish invalidation now eyed at the upper 50-line / 52-week moving average at ~85.80s.
Bottom line: AUD/JPY is testing support into the weekly open and IF price is going to rebound, this would be a good spot. That said, a break below this critical threshold would keep the near-term focus lower targeting the lower 50-line (currently ~80.50s) backed by the 1.618% extension of the decline off last year’s high at 79.45. From a trading standpoint, the immediate short-bias is at risk while above this support barrier with a rebound ultimately to offer more favorable short-entries.
Previous Weekly Technical Perspectives
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
To receive Michael’s analysis directly, please sign-up to his email distribution list[8] Follow Michael on Twitter @MBForex[9] or contact him at
References
- ^ Review this week’s Strategy Webinar (www.dailyfx.com)
- ^ Free DailyFX Trading Forecasts (www.dailyfx.com)
- ^ Swiss Franc (www.dailyfx.com)
- ^ descending pitchfork formation (www.dailyfx.com)
- ^ Free Beginners Guide (www.dailyfx.com)
- ^ parallels (www.dailyfx.com)
- ^ Avoid these Mistakes in your trading (www.dailyfx.com)
- ^ please sign-up to his email distribution list (forms.aweber.com)
- ^ @MBForex (twitter.com)
