Week sketches for three pairs | 13 December 2013

EUR/USD

Monthly chart: the pair is approaching upper Bollinger band (1.3860), which will be quite able to send the pair to get corrected the area 1.3354. If bulls show strength and will break 1.3860, then the point 1.4260 will become an alternative verdict (marked by red arrow).

Weekly chart: a local support by Bollinger medium band is seen (1.3421). Thus, we either will face rollback to this line from 1.3860 and further growth, or break through 1.3860 to 1.4260 without rollback.

Daily chart: control level has been broken (entrance as per O&U pattern at the point of 1.3642). Therefore, we wait for Euro growth in general. Area of possible finish of rollback is the range 1.3421-1.3525, from where one can open middle-term purchases.

Conclusion: main plan is touching of 1.3860, rollback to the range 1.3421-1.3525 and start of movement targeted for 1.4260.

Alternative option is a direct break of 1.3860 and growth to 1.4260 without special rollbacks.

GBP/USD

Monthly chart: two resistance lines (1.6558 and 1.7042) and support by Bollinger medium band (1.5787) create range for movements. We either see rollback to support from the first resistance line or this resistance will be broken and one we will have to wait for rollback just from the second resistance line (marked by blue and red arrow respectively)

Weekly chart: ascending potential can be significant. Support by Bollinger medium band (1.5787) is able to gravitate correction forces but will scarcely break such trend. Inability of the price to move below 1.6186  (red arrow) would be a strong bullish signal.

Daily chart: despite divergence, supportive point 1.6186 seems as promising for purchases as well.

Conclusion: main plan is rollback to 1.6186 and growth to 1.6558. Alternative option is - rollback from current 1.5787 and growth in the direction of 1.6558.

AUD/USD

Monthly chart: Australian pair is the only contract against dollar we consider here, which saved descending structure. Break of the last low would supply bears with dynamics to continue downtrend, to 0.8573 and 0.8072 (blue arrow). Reversal can be considered in the case of active upward movement from current levels purposed to attack Bollinger medium band (0.9907).

Weekly chart: bearish front has slowed, thus, continuation of the present trend and reversal movement are equally possible. Control level is support 0.8852.

Daily chart: we can consider large-scale bullish O&U with yet uncertain boundaries that will start working. Control level is the resistance from Bollinger medium band (0.9232), which can send the pair to break the last low and continue downtrend. Should bulls break this resistance, reversal can be considered as a completed task. Upon that, we will underline descending position of envelopes, which means that descending is still the main scenario.

Conclusion: main scenario is growth to 0.9232 and a new strong descending wave with breaking of 0.8852 and target of 0.8072. Alternative option is break above and growth to 0.9907 and up.