Price Action of FX Majors


On the Daily Chart, we seem to have run out of steam on the upward climb from June 6th thru June 20th. As we corrected down from the June 20th HI at 1.2470, price has now broken its more recent daily low at 1.2210 from June 23rd. This level is now key resistance. If price closes today below yesterday’s low at 1.2150, it is highly probable we will see a retest of our multi-year low before we see much more upward action on the EU. The 1.2110 level will offer support on a move further down, as price has a rare weekend gap that has never been filled at that level, and it is just above the 62% of the larger swing from 1.1876 to 1.2466. To the upside, we have initial resistance from yesterday’s intraday activity at 1.2270, which happens to line up perfectly with the 38% fib retracement of this weeks’ bearish move. Further resistance will be seen at the 1.2395 area as sellers seek to protect the recent swing HI on the Daily Chart.


Price is at a breaking point on GU. As seen on the chart, the bullish move from our low on May 20th has hit strong resistance at the 1.5125-30 area. This zone has acted as strong support for the GU throughout April and early May. Currently, price is forming a descending triangle just below this area of major resistance, which is a very bearish reversal pattern consisting of a solid base of support at the 1.5020 area, with successive lower highs to the upside. If we see a break of the 1.5020 with a strong hourly close below that level today, price could see a dramatic sell-off. The next major level of support is not until the most recent low at 1.4857. If buyers are able to gather strength and break through the resistance zone at 1.5125, the next level of resistance will be at 1.5250, which is the 79% retracement of the larger swing down on the 4 HR Chart from our Hi in April of 1.5525 and our low in May of 1.4223.


After a larger than normal move down yesterday, the Aussie has found a strong base of support at the 0.8465 level. This level is also the 50% fib retracement of the larger move on the Daily Chart from the May low of 0.8065 to the June HI of 0.8597. The early European session is seeing a sharp rally from that level as we come to test resistance at the 0.8590 level. If price fails to trade above the 0.8590 level, there will most likely be a retest of our low at 0.8465. If that level is broken, the next area of support is 0.8430 which is an area of previous support, and 0.8375, which is a strong area of support and resistance, and also the 62% fibonnaci retracement.

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