Aussie and US Stocks to Rally in Upward Correction
AUDJPY Double Bottom Intact | Testing the Neckline Again
After getting rejected at the neckline resistance recently, AUDJPY is making another attempt to break higher. Australia’s quarterly inflation readings came in line with expectations, with the headline figure showing a 0.2% gain and the core reading showing a 0.6% reading, and gave the currency a boost.
On its 1-hour forex chart, it can be seen that AUDJPY is sitting right on the neckline of the chart formation at 93.00 major psychological level. An upside break past this area could confirm the potential reversal and a possible rally of 200 pips, which is the same height as the chart pattern.
A pickup in risk appetite could support this move, as traders are more hopeful that Greece can avoid defaulting on its debt. However, data from China has been weak recently and RBA Governor Stevens has pointed out that the Aussie could still fall further and that monetary policy should stay accommodative.
With that, AUDJPY might have difficulty sustaining its climb past 93.00 unless a strong market catalyst keeps risk appetite in play. If 93.00 holds as resistance, AUDJPY could fall back to its previous lows at the 91.00 handle and create a short-term range.
EURCAD Testing Moving Average | Downtrend to Resume?
EURCAD may be set to resume its ongoing downtrend, as price has been consolidating close to a potential resistance zone. The pair is currently testing the 1.3200 major psychological resistance, which lines up with a falling trend line on the 1-hour chart and an exponential moving average.
However, stochastic is indicating oversold conditions, which means that sellers are already exhausted and that buyers might take over. If so, the pair could break past the 1.3200 level and push for more gains, possibly until the next area of interest at 1.3300.
Much could depend on the outcome of the Greek debt talks this week, as the government has been given until Friday to submit its revised list of economic reforms. If these are approved and the country is able to secure the next set of aid, the threat of a default could be significantly lower and so will fears of contagion.
On the other hand, if Eurogroup leaders continue to play hardball, the euro could face another string of losses against its counterparts. Bear in mind that the BOC has clarified that they are no longer looking to cut rates again, as economic data has been consistently improving lately.
Tesla Shares Upside Breakout | Potential Uptrend Looming
After trading in a steady downtrend since late last year, Tesla shares were able to break above the falling trend line resistance on its long-term chart. Price surged past the $200/share level and the moving averages, suggesting that an uptrend might take place.
If so, Tesla shares could climb to the next resistance at $220/share and erase some of its recent losses. Sustained buying momentum might even lead to a move up to the next resistance at $260/share in the longer run.
The pickup in oil prices has been responsible for driving share prices higher, as this could offer better prospects for demand for electric cars. Recall that falling fuel prices drove Tesla shares lower early this year with investors anticipating lower earnings figure for the first quarter.
The moving averages are also crossing higher on the 4-hour chart, an early signal that an uptrend might take hold. Should these indicators tread further apart, the bullish momentum might gain more support. However, if sellers return, price could move back to the previous support at $185/share.