The US 30 Index attempted to rally on Tuesday but spent Wednesday and Thursday forming a Head and Shoulders pattern that triggered in the final hours of yesterday’s session. This is shown on the chart with the head and shoulders tops marked in red boxes and the neckline in blue. As the market sold off heavily last Friday, today’s trading environment is strained approaching the weekend as risk-off sentiment resumes. Resistance above the area of current price action comes in at the neckline at 24500.00, the right shoulder top at 24957.00 and the top of the head at 25300.00. Further up is the high for the week at 24957.00.
Support at 23836.00 was formed after the US market closed yesterday. Should this level be broken, then 23616.90 becomes the next support, part of the zone around 23600.00, followed by 23246.00 and the low for the week at 23108.00. A loss here would see 23000.00 tested and potentially as low as 22500.00.
This pair appears to be bullish, with a break having occurred above the blue downtrend line at 0.93782 on Wednesday. This blue trend line was retested as support at 0.93538 yesterday and price is attempting to rally higher. Resistance is at the high for today at 0.93969, followed by 0.94200 and then the weeks high at 0.94703. A break above the week’s high targets resistance at 0.95000 and 0.95445 and the 200-period 4-Hour MA.
The bearish case is for a loss of the red supporting trend line. This would present a possible head and shoulders pattern best seen in a 1-hour time frame. The neckline for this pattern is at 0.93471 and represented on the chart by a magenta trend line. A loss of 0.93386 would confirm the move, with a target below support at 0.92544 and at 0.91279.