Trader thoughts - the long and short of it

The weekly charts that matter into the April close.

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Source: Bloomberg

EUR/USD weekly

It’s make-or-break for EUR/USD over the next few days. We’ve been tracking this consolidation in for months now and heading into the close of April trade the focus is on a resolution to this near-term consolidation pattern just above former slope resistance (blue) / turned support. Note that daily RSI (relative strength index) has made a break below a three point support trigger and highlights the threat for a downside break.

Bottom line:  Last week’s outside-reversal candle does cast a bearish outlook on price but we’ll need to clear this formation to validate. Key support rests at 1.2167- a break below this threshold would be needed to validate a larger-scale reversal in price targeting the 2012 low at 1.2042 and the 2018 opening-range lows at 1.1916. Interim resistance stands with the February trendline – a breach / close above this mark would shift the focus back toward the critical resistance confluence at 1.2598 where the 61.8% retracement of the 2014 decline converges on the 2008 slope line. For now- look for a break of this range.

GBP/USD weekly

The British Pound has been trading within the confines of this multi-year ascending pitchfork formation with price posting a weekly outside-day reversal off the 2018 highs last week. The threat remains lower near-term but ultimately advance remains constructive while above 1.3675-1.3737 where the 2016 high-week reversal close (Brexit) and the 23.6% retracement of the 2017 advance converge on the lower median-line parallel (blue). Resistance remains steady at 1.4346 with a breach higher targeting 1.4571.

Bottom line: Cable may be in for a larger correction here before resuming higher. For now, look for resistance at the yearly high-close  / 200-week moving average at 1.4236 with a break lower to ultimately offer more favorable long-entries near structural support.  In the event of a topside breach, look for initial resistance targets at 1.4571.

AUD/USD weekly

Aussie has continued to hold just above a critical support barrier at 7635/37- where  the 38.2% retracement of the 2016 advance and the 61.8% retracement of the May advance converge on multi-year trendline support. Note that last week’s decline erased all of the April gains with price closing just above the monthly low-close on Friday at 7660. A break below this threshold would risk substantial losses for the pound with such a scenario targeting 7480 -7500. A breach / close above yearly-open resistance at 7801 would be needed to shift the medium-term focus back to the long-side.

Bottom line: Aussie is testing multi-year uptrend slope support with the immediate short-bias at risk while above 7636 – look for a reaction this week with the focus range to beat between 7635- 7800.

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