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Technical Analysis – Charts of The Week

AUS200: Viable Long positions above the Pivot at 7500 targeting the key resistance at 7565 and if upwards momentum continues, then a possible test of the resistance zone at 7640 to 7610

AUS200

  • Resistance Zone: 7640 to 7610
  • Key Resistance Level: 7565
  • Major Pivot Point: 7500
  • Key Support Level: 7365
  • Support Zone: 7260 to 7230
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – ViableLong positions above the Pivot at 7500 targeting the key resistance at 7565 and if upwards momentum continues, then a possible test of the resistance zone at 7640 to 7610.

Alternatively, if prices fall below the Pivot at 7500 then possible short positions towards the key support level at 7365 and then targeting the Support zone at 7260 to 7230.

AUS200 Cash 4 Hourly Chart

Chart Analysis:

Directional bias: 1 Week AUS200

Technical Analysis of AUS200 Four Hourly chart shows that prices are keeping above the 200 Day EMA line indicating a Bullish trend. On the shorter time frame, the prices are consolidating just under the 50 Day EMA. The long-term upward Bullish channel was broken on 16th August and prices dropped sharply to touch the trough at 7435. There was a quick recovery as the investors realized the selloff was overdone and prices jumped back to touch 7520 levels. This level on the chart is proving to be difficult to break through as Investors are waiting for more signs to decide the direction. However, Bulls may find stronger resistance in this zone as it is also the Bullish Channels Support zone. 

AUS200 Chart shows that the support zone is at 7260 to 7230. If prices fall sharply from the current levels, then the support zone could hold the prices. The Resistance zone is at 7640 to 7610 and it will take a lot of conviction from the investors to break through the all-time peaks on the chart. The MACD indicator on the daily chart shows that there could be a further drop in the prices as the Blue MACD line has crossed the Signal Orange line. The cross-over can also indicate a false signal, but it suggests the selling pressure may continue from here.

Fundamental summary: As the market awaits FOMC meeting minutes that indicate Federal Reserves' direction on Inflation and Labour Market Conditions, the broader US Market has dropped from the all-time peak on Monday at 4479 to touch 4424. Apparently, it's profit-taking after poor US Retail Sales Growth Figures. The RBA has continued to keep the interest rates at a record low of 0.10% and it is forecasted to stay the same till 2024. The Australian economy and GDP facing challenges due to the ongoing lockdowns amidst the spread of Covid infections.

USD/JPY

  • Resistance Zone: 111.00 to 111.15
  • Key Resistance: 110.50
  • Major Pivot Point: 109.70
  • Key Support: 109.70
  • Support Zone: 108.36 to 108.22
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – Viable Long Positions above the Pivot Point of 109.70, first targeting the Key resistance at 110.50 and then the Resistance zone at 111.00.

Alternatively, Short positions below the Pivot Point at 109.70 targeting Key support at 109.06, and then if selling pressure continues prices can further move down to test the support zone at 108.36 to 108.22.

USD/JPY Daily Chart

Chart Analysis: 

Directional bias: 2 Weeks USD/JPY

Since our last analysis on the USD/JPY pair, the prices have broken the upward parallel channel on around 10th July and now prices are consolidating just under the Pivot of 109.70.

The chart shows that the pair is testing the Pivot point and moving in a sideways parallel channel forming a head and shoulder pattern. The Pattern is moving towards forming the right shoulder and shows there could be an upward move from here to test the key resistance at 110.50. As the key resistance is at the top of the right shoulder prices may drop sharply from here back to Key support level at 109.06 creating opportunities to maybe BUY now and SELL at the key resistance level.

Prices are Just trading above the 200 Day EMA indicating a Bullish trend and are now consolidating just below the 50DAY EMA showing the weakness in the Bullish trend in the shorter term. The Support Cluster at 108.36 to 108.22 appears to be strong and could hold prices if a sell-off occurs.

Fundamental summary: The US Retail Sales numbers and Chinese retail sales numbers fall short of the market expectations as the Dollar tries for the fourth time to break through the resistance at 93.20 level. On the other hand, JPY is strengthening as bond yields are weakening as the Dollar/Yen pair continues to consolidate at the current levels.  

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal Rathod

August 19, 2021

  • Reading time: 4 mins
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