Technical Analysis From Fxmars May 11

May 14, 2014

EURUSD:

The first thing we notice on the D1 chart by the EUR/USD is the bearish divergence between the graph and the Stochastic oscillator. The tops from April 11 and May 8 are in an ascending order on the graph, while the Stochastic Oscillator has arranged them in a descending order. This was the basic sign for the big bearish drop in the last two days, which also brought the price through the lower level of the purple triangle. For this reason, the first break out of the triangle might appear to be false. Now the price is testing the already broken blue 6-years bearish line as a support. If the price breaks through the blue bearish line, we might see a decrease to 1.36714 support, which is also a neck line of the head and shoulders formation with tops from March 13 and May 8. If the price bounces from the blue bearish trend line, the first break through the triangle might appear to be real (not fake), and the price might continue its overall bullish movement, where the next decent resistance is the 1.39900 line, which indicates the top from May 8.

USDJPY:

The price did a bearish break through the purple 1-year bullish trend line, which is also the lower level of the purple symmetrical triangle from the beginning of January. The break also covers the smaller yellow ascending triangle, which was the last location of the price. After this significant break, it would be likely to see a decrease of the price to the 101.197 red support, which connects the last few bottoms of the price. At the same time, the signals of the Stochastic Oscillator are in a contradiction with the events we already mentioned. After interacting with the level 20 line, the blue line of the indicator has crossed the red dotted line in bullish direction, and the indicator has bounced in bullish direction. For this reason, we believe that the price might still drop to the 101.197 support and then it could start seeking bullish movement, which would also satisfy the signals of the Stochastic Oscillator. If this happens, the next resistances the price would meet are the already broken purple bullish trend line and the green 102.770 resistance.

GBPUSD:

The cable shows us a beautiful bearish divergence between the chart and the Stochastic Oscillator, which has already started pushing the price toward a downward movement. Maybe the price would satisfy the false-broken yellow rising wedge formation from April 10 after all. Currently, the price is testing the already broken 1.68377 resistance as a support. This is a level, which was tested on February 17, April 10, April 17 and April 23 and it stood the pressure of the price. Now the level is broken and the price is testing it as a support. If the price bounces from the 1.68377 support, we might see a movement at least to the previous top of the price at 1.69820. If the price breaks the 1.68377 support, the rising wedge formation might gets completed and we might see the price interacting again with the lower level of the blue bullish corridor from the end of September 2013.

USDCHF:

The first thing we notice on the D1 chart by the Swissy is the confirmed double bottom formation on the D1 chart and on the Stochastic Oscillator. The 0.88618 resistance also plays the role of a neck line for the formation and it got broken in Friday. Since the formation is also confirmed by the Stochastic Oscillator, we have a significant reason to believe, that the price might increase to its previous top at 0.89486, which is also the neck line of a bigger double top formation (purple). If this happens, it would appear that the bearish break through the yellow triangle from the middle of March is false. On the other hand, if the price does not manage to complete the small double bottom formation and it starts decreasing, the supports the price would experience are the upper and the lower level of the already broken yellow symmetrical triangle, the 0.87697 support and the 0.87453 support.

AUDUSD:

The Aussie attempted a bearish break (red circle) through the purple bullish trend line from January, which is also the lower level of the purple symmetrical triangle from April 10. The followed increase of the price has the shape of a rising wedge formation (small blue lines), which brought the price to the upper level of the triangle. As we all know, the rising wedge formation has bearish potential, and in this case, it has the potential to bring the price out of the symmetrical triangle, through the lower level. Furthermore, with meeting the upper level of the triangle, the price also met the 0.93787 resistance, which makes the test point even stronger. At the same time, the Stochastic Oscillator is just crossing its lines in bearish direction after it interacted with the 80-level line and it looks like we will see a bearish bounce. For this reason, if the price starts decreasing, the supports it would meet are the lower level of the purple triangle and the red 0.92053 line, which was already tested twice on April 3 and May 2. If the price breaks through the upper level of the triangle, it would probably increase to the 0.9458 resistance, which indicates the 6-months high of the price.

XAUUSD:

After it broke first through the lower level of the red symmetrical triangle from March 17, which also matches with the bullish trend line from January 8, the price started moving in a bullish corridor (green). The corridor brought the price through the yellow resistance at 1307.01, which indicates the previous top of the price, which, despite of the break through the lower level of the triangle, accredits the bullish movement of the price. Now, seeing the direction of the price, despite of the break through the lower level of the triangle, it is hard to be said which side of the triangle the price broke through. Currently, the price is testing the lower level of the green bullish corridor. If the price breaks through this level, the next support to be met is the 1273.95 support, which points the previous bottom of the price, and the already broken red bearish trend line from March 17, which is also the upper level of the triangle we mentioned. If the price bounces from the lower level of the green bullish corridor, the price would probably meet the already broken lower level of the triangle as a resistance, the 1316.29 resistance, which indicates the previous top of the price and the upper level of the corridor.

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