Forex Weekly Technical Positions – 2nd March

From our weekly technical analysis we recommended taking long positions in AUDJPY, CADJPY and AUDNZD, while calling for short positions in EURAUD and EURCAD. This article gives a technical overview of these individual currency pairs.

AUDJPY:

This pair has formed a bullish piercing line candlestick formation on the monthly charts, indicating a potential move to the upside after two months of decline.

The fact that this bullish candlestick pattern appears on a respected trend line shows that we could see a move to the upside. The main target will be 101.008 level which if price fails to break higher could give early signs of a collapse in the pair.

AUDJPY Monthly Charts, March 2015
AUDJPY Monthly Charts, March 2015

From the daily charts, take notice of the falling price channel. The break out is not yet achieved but we expect it to happen sooner than later. Look to buy from 93 levels ‘after’ price break outs of the price channel (could happen on a dip) with stops at or below 90. Take profits at 95.5 and 97 while leaving the remaining position to run its course trading at break even and collecting positive overnight swaps, with the aim to see a rally towards 100 or 102.

AUDJPY - Daily Charts trade set up, 02/03/2015
AUDJPY – Daily Charts trade set up, 02/03/2015

Alternately, if price fails to rally above 93 on break out but dips lower, continue to hold the position and exit on a retracement back to 93 or as close as price can get.

CADJPY

The monthly charts for CADJPY shows a very strong resistance formed near 97.19 and 95.61. After January’s steep fall and February showing some recovery, it is easy to doubt if the rally in CADJPY will be sustained. From the looks of it, CADJPY on the monthly charts looks more like a retest of the break out level than anything else.

CADJPY Monthly Charts, March 2015
CADJPY Monthly Charts, March 2015

Readjusting the price channel to the weekly price action, we could expect the recovery to last towards 97.19 levels before the pair starts to give up on its quest for further gains.

CADJPY Weekly Chart, 2nd March 2015
CADJPY Weekly Chart, 2nd March 2015

The daily charts perhaps gives the final answer as we notice a bearish flag taking shape. In the short term CADJPY should be looking for a rally to 96.65 levels before it starts to lose its bullish momentum.

Therefore the long positions in CADJPY are to be considered as a counter trend trade. Note the arrows showing the lower highs and lower lows, indicative of a possible stall in rally near 96.648.

CADJPY Daily Charts, Trade Set up
CADJPY Daily Charts, Trade Set up, 02/03/2015

We would therefore recomment to buy from 94.7, targeting 96.5 with stops below 92.14. Or look for short positions near 96.65 levels or higher.

EURAUD

There are no clear clues from the monthly charts, but the weekly charts points to a lot of interesting outcomes.

EURAUD Weekly Chart and Trade Set up
EURAUD Weekly Chart and Trade Set up, 02/03/2015

Firstly, we have a broadening wedge type of a pattern where price failed to break higher but instead collaped below 1.49 levels. The lower trend line has managed to hold prices but is showing signs of giving up its support.

The decline should see a bounce from 1.4132 levels and even down to 1.38 levels before we expect to see a retracement to the break out level at 1.432.

For the very short going on EURAUD targeting 1.4132 and 1.38 (on break even) would be a good bet. The price at 1.38 is strong so a bounce is highly probable.

In the very long term, EURAUD is potentially looking to an eventual target to 1.29755 levels.

EURCAD

The monthly charts for EURCAD shows a bearish engulfing on the body (not very reliable as the wicks tell a different story). Nonetheless the price action does point to short term weakness with the possibility of dipping to 1.355 levels.

EURCAD Monthly Charts, March 2015
EURCAD Monthly Charts, March 2015

The weekly charts give a more clear picture as last week closed on a bearish engulfing and a decline to 1.3549 is imminent. From the daily charts, we notice a lot of consolidation taking place as price action is very choppy. Look for short positions on a retracement rally towards 1.4037 targeting 1.355 levels and have stops positioned above 1.4358

EURCAD, Daily Charts Trade Set up, 02/03/2015
EURCAD, Daily Charts Trade Set up, 02/03/2015