Weekly Forex Update: GBP/USD; High Grade Copper; Wall Street Cash

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Weekly Forex Update: High Grade Copper

The uptrend on High Grade Copper began with a Triangle breakout through resistance at 30160 on the daily chart. The subsequent rally carried prices higher to the Autochartist Forecast area between 31295 and 32102 (F). The Forecast was formerly resistance for the move higher, but now that prices have established buying support above this level, the area will now be support.

The four-bar Autochartist Initial Trend reading indicates that the daily chart may be transitioning into a stage of increased volatility, and that prices could begin to exhaust at prior highs. As of now there is a layer of resistance between 35375 and 36375, established from February to April of earlier this year. If it becomes apparent that the distribution cycle is an early indication of bullish momentum fading, look for prices to congest at current levels, with selling pressure preventing an upward continuation. For prices to maintain the gains made through summer, the willingness of the bulls to support the Forecast area is needed.

Weekly Forex Update: Wall Street Cash

The congestion on the daily chart of the Wall Street Cash index shows the degree to which volatility and lack of organization are ruling the U.S. equities market. The Triangle pattern suggests that near-term resistance is waiting at the downtrend line at 10578 (Y), and that uptrend line support is at 9960 (X). This does not include the wider range within which the index has been trading, as the floor is currently at 9577 (A) and the ceiling confirms selling pressure around 10700 (B).

The four-bar Autochartist Initial Trend reading confirms that the current market stage is distribution, characterized by increased volatility and a less-than-predictable trading range. The daily chart's trading range will continue to decrease as long as price action remains within the pattern. The current distribution stage increases the likelihood that prices will exhaust at the support and resistance areas of the pattern; however, if the volatility drops then the Initial Trend reading could fall to a value of three bars or less, which would increase the chances of a breakout or breakdown through the pattern. It is therefore important to look for the trading range to decrease within the boundary of the pattern while looking to set up a breakout or breakdown should momentum carry prices outside the Triangle's range.

Provided by www.autochartist.com

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