Aussie dollar updated

In my previous Aussie dollar post I'd put a watch on a break out of a triangle pattern which seemed to be developing. The Aussie broke upside with a close at .9381 on June 11th and continued strongly for a couple of days as it approached a recent high.

However, I admit to being disappointed at the ensuing pull-back. I would have expected this to hold above the upper boundary of the triangle but today's close gives cause for concern. Sometimes market do slightly creep back inside formations before taking off again. The Aussie would need to show signs of quick recovery from here for me to regain confidence. I think it wiser to stand aside though and await a confirmation above a new upper line drawn above and being at the level of last week's .9435 high.

The alternative is that we are going to re-test the .9200 level. AS I said, disappointing this hasn't followed through on the upside but sometimes patterns do fail. I have to admit I've always been a bit sceptical of upside breakouts from flat bottom triangles. They are more often a bear market pattern.

But let's wait and see what develops now. The important levels are still close and I'm sure another opportunity will present itself soon.

USDJPY next move worth the wait

Looking at the long-term chart of USD/JPY the trend is still solidly up. The original head and shoulders pattern  broken in late 2012 well and truly reached its target. The large symmetrical triangle of 2013 broke upwards and should have reached 109.00. It hasn't yet made it.

That makes me wonder if the triangle now forming between 102 and 105 is going to be a continuation pattern for a push up to this 109 level.

Of course a break and close below 102 and I'd consider shorting for a move down to the 99.00 handle.

So as with Gold and the Aussie dollar the setup is there for the patient trader. Don't get too caught up in the daily noise when the better percentage plays will come.

Gold - here we go again?

It's easy to get tied up in the day-to-day or even hourly charts of gold, but when you stand back a bit the important long-term levels become clearer.

The past year looks remarkably similar to the top formed by gold 2011-2013. Now not exactly the same of course but a descending triangle of about half the size of the one which preceded the carnage (predicted by this blog) which occurred when gold broke it's support then.

Since June 2014 spot gold has been forming what also looks like a descending triangle with a support level around $1180. The lower highs indicated the most likely outcome of this formation. A decent break and close below $1180 should see another $200 fall in gold to at least the $1000 mark. A break above the falling trendline, currently around $1360 can't be ruled out of course and pre-empting either of these moves would be foolish. Better just to sit back, be patient and wait for the break. In gold you do have to be incredibly patient.

Although smaller patterns do provide shorter term trading opportunities such as the recent April/May symmetrical triangle which has pretty much reached its objective. Remember you don't always have to be in the market.

Silver also shows a similar pattern.

Aussie Dollar at important juncture

The Australian dollar sits at an important juncture at the beginning of June 2014. The important levels to watch for the next major move are clear. A flat bottomed descending triangle has been forming since early April giving traders a delicious opportunity from a technical analysis purists point of view. More often than not a descending triangle breaks the lower boundary and then proceeds in that same direction for at least the same width as the triangle itself - in this case close enough to 2.6 cents from what the breakout would be.

The breakout point is somewhere between .9199 and .9205. A clear break and close below this level is needed. Sometimes a market will break a level but not close below it casting doubt on the move.

There is also the possibility the Aussie breaks the upper descending line and continues up for the same distance. The breakout point depends on timing and where the line is as it continues to descend.

Either way this is one to be patient on and wait for the market to show you. If you can't wait then options could be the way to go - buying a put and a call just outside the current range.

Notice the current resistance occurred at a previous support level formed by a nicely symmetrical head and shoulders pattern in the September to November period in 2013. The downside count for this was fulfilled nicely at the .8770 level.