Daily Insight: Metals Bounce Back From Lows, Momentum Remains Bearish
Matt Simpson | Nov 26, 2013 04:21AM ET
Market Snapshot:
Metals bounced back from their lows but momentum is still clearly bearish.
GBP retraces from last week's gains but too soon to tell if this is merely a retracement before further buying begins, or the beginning of something much larger. Regardless the trend remains up so bullish setups remain the preference for GBP pairs.
News is quite light tonight for most pairs but keep an eye on the GBP Inflation report hearings.
GBP/AUD Daily:
AUD/USD INTRADAY:
It is not often I resort to internal trendline but this one has already been respected as both support and resistance, and the trendline also coincides with the resistance confluence around the 0.9230 area.
I had originally started the analysis with a bearish channels but it turned into one of those affairs where I spent so long fiddling around with the lines that I realised it just wasn't working. But then bearish channels need not be neat and perfect - however in this instance the internal trendline may provide better resistance if tested, or if broken to the upside could be seen as a big victory for the bulls and a much larger bullish retracement to follow.
My bias remains bearish with the next target being around 0.920-50. However I do fancy a retest of 0.923 before losses resume so bearish setups beneath resistance levels is the preferred approach here.
USD/JPY:
After the (eventual) explosive bullish move from the 6-month triangle, this pair has not looked back. Yesterday saw a move up to the MR3 Pivot where price has stalled.
In yesterday's webinar we discussed how price rarely moves past the 3rd resistance, however in this case I am willing to make an exception for the following reason. Due to the triangle contracting (which is has to, in order to be a triangle) each successive month's range has been smaller. Therefor the pivot points will be closer together than over the past 6 months.
The additional reason is I don't tend to take too much notice of a Pivot Point S/R in isolation. And when you look at the clear trend forming on the H4 timeframe and how price has come back into the buy zone (of the MA's) then I see each tick down as a better price to get long.
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At time of writing I see no bullish setup so patience is required - however in the event of a bullish setup appearing then my next target is 102.50!
- Only a break below 100.95 swing low weakens the intraday trend
- Only a break below 100.45 would open up the possibility of a retest of the broken trendline
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