Monthly Overview: December 2010 - Supports and Resistances
Here below is a table with the Supports and Resistances shown on the Forex AI platform for Monthly charts on 11 Major Pairs and Gold (XAU/USD). This includes the forecasted direction yielding a better R:R for those pairs, and an evaluation of the charts and candlesticks patterns along with Fibonacci retracements. We will be examining in further detail the daily and weekly scope during the next week-end.
MONTHLY CHARTS
EURUSD
This pair is showing a falling wedge inside a bearish channel. This looks more like an ample consolidation, prices have bounced back down from the 50% Fibonacci retracement and the month has ended around the middle of the channel, but given the pinbar shown in last June we can expect a continuation of the bullish recovery at least to retest November highs.
GBPUSD
The Pound/Dollar is consolidating inside a slightly rising pattern and almost forming a symmetrical triangle (a descending triangle in fact, if we don’t take the long wicks of the lowest lows into account). I would favor a downward break provided the strength of the Pound continues, as the continuation pattern is also showing on GBPCHF and GBPJPY.
EURGBP
The Euro/Pound has formed a symmetrical triangle and is slowly consolidating with a downward bias. However, I would favor a bullish view with caution, as there is a much better risk to reward expectation to the upside, but given the strength that the Pound has been showing lately we could eventually push down to a retest of psychological round number 0.8000 where there is a fairly strong previous support area.
USDCHF
The Swissie has bounced from the lower downtrend line and seems to be heading back up to the median line of the bearish channel. I would expect a pullback at least to a 38.2% Fibonacci, as the price is consolidating above the first level of monthly support. If the retracement occurs and the price pushes further back up and breaks the middle line, we would see a continuation to the upside to reach the upper downtrend line at around 1.10/1.12.
EURCHF
This pair has formed a falling wedge inside a bearish channel, and the risk to reward ratio points strongly to a bullish reversal. If the channel and last lows hold, we can expect a turn back to the upside, at least to the 38.2% Fibonacci retracement level or even further up to the 50%, where it will have to fight a strong resistance at 1.46 to keep on the rise.GBPCHF
The Pound/Swissie shows a descending triangle with consolidation over the last three months, this could lead to an expectation for a continuation of the down trend. If however there is a break to the upside, we can have a retracement towards 1.75/1.76 where there is a strong level of resistance.EURJPY
Euro/Yen has formed a falling wedge and has been trading inside an ample range for the last 6 months. I would expect a break upwards above 112.00 after a retest of the lowest lows, targeting the 50% Fibonacci retracement on the long term at around 137.00/138.00, then a further continuation of a bullish move up to psychological level 150.00.
GBPJPY
The Geppy is showing a chart pattern very similar to that of GBP/CHF: a descending triangle with potential continuation of the down trend. We could see an attempt to the upside before it keeps on falling, but I personally don’t think it would go much further than 140.00/145.00. As for the previous comments on Pound-based pairs, this will depend on the currency holding on to its actual strength.
USDJPY
This pair is still trading back inside a bearish channel despite April/May piercing of the trend line. However, it has formed a falling wedge and will quite probably look to reverse to bullish if 85.00 is broken. I would favor building long positions and targeting the resistance area at 88.00 as first step, expecting a continuation up to the last swing high above 92.00, which is also the 38.2% Fibonacci retracement level.
USDCAD
The Loonie is also trading inside a falling wedge with expectations for a reversal back up. A last attempt to break support area (0.99/0.97) and touch the lower channel line is possible, then we could see a retracement to 1.07 then 1.10. A clear break of 1.05 is needed, though, to think of a real bullish reversal, as it is now still trading inside an area that has previously shown a strong consolidation.
AUDUSD
November has been bearish for the Aussie after having finally crossed over parity. Momentarily heading down, this pair could find a strong support at 0.9400 which is the 38.2% Fibonacci retracement level. A 50% level could also be targeted but I would still expect it to continue ascending back to retest all-time highs, after December’s profit taking.
XAUUSD (GOLD)
Gold is still evolving up inside its ascending channel, however ranges have been tightening a bit and the channel is starting to look more like a rising wedge. Same as for the Aussie, we can expect that end-of-year profit taking and low trading volumes will give way to a retracement, but I personally don’t think that it could go much lower than 1250.00.
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