Three pairs to watch next week – NZDUSD, GBPUSD, EURAUD
A large head and shoulders has formed in recent weeks after the market pulled back from its 2017 peak of 0.7557. The head and shoulders themselves are fairly easy to identify but there is a degree of subjectivity in where the all important neckline lies. I have drawn it at 0.7190 on the chart above and should this level break then the profit target from a textbook perspective would be at 0.6823.
Possible support: 0.7190, 0.7055, 0.6823
Possible resistance: 0.7340, 0.7455, 0.7557
This pair traded down to its lowest level in two months in the past week and in doing so price has fallen below the Ichimoku cloud on D1. This can be viewed as signalling a trend change and that the move higher seen since March is now over. However, be warned that a break below the cloud back in June turned out to be a false move and traders will be looking for the accompanying lines to also break down through the cloud and further support this signal of a change in trend.
Possible support: 1.2775, 1.2600, 1.2355
Possible resistance: 1.2840, 1.2920, 1.3040
This pair is attempting to rise once more and has traded back near prior resistance at 1.5015. The uptrend remains intact and a break above the 1.5015 level could open up a possible assault on 1.5230. The 8 and 21 period EMAs remain in a bullish orientation (8 above 21) but with price close to both of these this could change in the coming week. A break below 1.4735 would be a negative development for price and would threaten a deeper pullback.
Possible support: 1.4795, 1.4735, 1.4630
Possible resistance: 1.5010, 1.5230, 1.5400