Market Weakness


The EURJPY continues to slide, and has settled into a descending trading channel. Today’s tag of the upper channel line was marked with a doji candlestick, followed by a strong drop down. We can expect a traversal to the lower channel line, which will break through support at 111.50. The next support area is 110.75.


Although most major currencies jumped significantly on Monday the GBP went no where. This relative weakness is a bearish sign. As we can see on the chart, prices struggled at the 1.5750-1.5775 resistance level, and appear ready to break down through the 1.5650 level.


Although Gold rose nearly 1% today, we can see it is well off of its recent highs. More significantly, today’s rally stopped at short term resistance of 1350, where it was met with swift selling. Additionally a descending trendline joined in at the 1350 level contributing additional resistance. Unless the 1350 level is broken, we expect to see additional weakness in gold in the short term.

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