Charts for Next Week – EUR/USD, Euro Crosses, AUD/NZD, Crude Oil & More

The euro has declined in-line with expectations, but now falling into a support zone, caution warranted on fresh shorts. A couple of euro crosses worth checking out. AUD/NZD lower out of H&S pattern. Crude oil breaking support levels, broader move lower may be in store.

TECHNICAL HIGHLIGHTS:

• EUR/USD trading down into top of support area, cautious on shorts
• EUR/GBP wedge forming, EUR/JPY at risk of losses further into Q4 range
• AUD/NZD snaps neckline of H&S, swift rejection yesterday
• Crude oil broader decline may be underway, watching next line of slope support

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EUR/USD TRADING DOWN INTO TOP OF SUPPORT AREA, CAUTIOUS ON SHORTS

Coming into this week and reiterated in Wednesday’s webinar, we were looking for further weakness out of the euro. But with momemtum slowing at slope support dating back to May 2016 and the trend-line from December just a shade lower, caution on new shorts looks warranted at this juncture. A break below, however, will bring support just below 12100 into view.

EUR/USD DAILY CHART

EUR/GBP WEDGE FORMING, EUR/JPY AT RISK OF LOSSES FURTHER INTO Q4 RANGE

EUR/GBP continues to construct a multi-month wedge (not the cleanest pattern, but…), and while it may not trigger next week, it could break down any time soon. Or, for that matter, break the top-side trend-line which has kept a tight lid on it since October. The thinking is it will lead to a continuation from the August high, but patience will need to be applied first before becoming too aggressive on that idea.

EUR/GBP DAILY CHART

EUR/JPY has once again fallen into the range which dominated trade during Q4. It broke the trend-line from August yesterday and is currently retesting it. A rejection on the retest will have focus shifted on the bottom off the range around 13150.

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EUR/JPY DAILY CHART

AUD/NZD SNAPS NECKLINE OF H&S, SWIFT REJECTION YESTERDAY

AUD/NZD has been on our radar in recent weeks with the development of a ‘head-and-shoulders’ pattern. It broke the neckline earlier this week, put in a strong rejection bar yesterday post-RBNZ. Looking for follow-through to the downside with ~10500 targeted in the intermediate-term. (Speaking of H&S patterns, the EUR/AUD idea posted the other day never triggered the neckline, so no trade.)

AUD/NZD DAILY CHART

CRUDE OIL BROADER DECLINE MAY BE UNDERWAY, WATCHING NEXT LINE OF SLOPE SUPPORT

Crude oil snapped a slope earlier this week dating back to July. We’ve been discussing it lately as important support, and with its break on Monday came a rush of selling. Two trend-lines from the fall have come under fire, and another slope from July is eyed as the next level of support. That level currently clocks in around the mid-58s.

The record long positioning in the futures market (734k) could be becoming a factor as the market appears to have gotten ahead of itself and now unwinding. We’ll discuss the technical and positioning developments further on Tuesday at 10 GMT in the weekly indices/commodities webinar.

CRUDE OIL DAILY CHART

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---Written by Paul Robinson, Market Analyst