Monday, 29 August 2011

EUR/USD breaks upwards through trend line resistance

With a pervasive mood of universal despair regarding European economic problems, I believe that any bullish action by the EUR/USD is worth sitting up and taking notice of. 

The daily candlestick chart shows an upwards break by the EUR/USD through trend line resistance, as well as a bullish cross by the 18 and 40 day moving averages. There is still possible resistance at the outer trend line, as well as the July, June, and May highs. In an up trend, there tends to be no such thing as resistance, so if the market advances from current levels, we will be able to judge the health of the infant up trend by observing whether or not these levels manage to slow or halt the market.

The weekly candlestick chart shows that the daily chart upwards break is happening in the context of a long term up trend. Momentum (MACDH) is close to turning positive...

India Nifty 50 trend line bounce

Weekly candlestick chart. The Nifty has tested the lower corrective trend channel line, and bounced, a near term bullish signal. A move through the upper channel line would be long term bullish...

ASX SPI 200 tests trend line

Daily candlestick chart, showing the after hours market through to close of  trading last week. Remember, the ASX 200 closed at 4200 on Friday. The after hours market is indicating a higher open this week at 4224.

The aggressive short-term trend line is perhaps relevant to short-term traders, depending on their time frame. An upwards break would be of no concern to bears with a longer term view, unless it eventually lead to a rise above 4500 or so.

Gold rebounds

Daily candlestick chart. Thursday's low is key, the second rightmost candle, with the long tail, testing the trend line. If (IF) that low is broken, the near term up trend will be finished. Conversely, if it holds, Gold will likely make new highs.

EUR/USD probes higher

Daily candlestick chart. Trend line resistance has been broken, though I am not certain if the EUR/USD is in the clear yet. There may be resistance at the earlier August highs, as well as the July highs.