Facebook and GBPUSD Downtrend May Lie Ahead
GBPUSD Descending Triangle | Potential Upside Breakout
GBPUSD has formed lower highs and found support at the 1.5000 major psychological level, creating a descending triangle pattern on its 1-hour time frame. The consolidation has gotten tighter as price moved to the end of the triangle, signaling that a breakout in either direction is bound to take place.
Stochastic is moving up, hinting that an upside break is likely. This might last by around 200 pips, which is the same height as the triangle pattern. Resistance at the 1.5200 major psychological level could be tested, with the potential for further gains if buying pressure is strong enough.
A downside break is also possible, as the path of least resistance in terms of fundamentals is to the downside. Recall that the FOMC decided to retain its hawkish stance, unlike the BOE which seemed to favor keeping monetary policy unchanged for much longer. The upcoming BOE statement could determine which direction this pair might break out.
If further consolidation is seen in the next few days, Friday’s NFP release might be a stronger catalyst for a breakout, as the US economy is expected to show a slight slowdown in hiring. Weaker than expected data could lead to a short-term rally.
AUDUSD Fibonacci Retracement | Resistance at .7900
AUDUSD has recently found support near the .7700 major psychological level and seems to be gearing up for a retracement from its current downtrend. Using the Fibonacci tool on the latest swing high and low indicates that the .7900 major psychological level might act as near-term resistance.
This lines up with the 50% Fibonacci retracement level and a previous support area, which means that plenty of sellers are waiting to hop in the downtrend at that region. Stochastic is still moving up for now, which means that bulls have enough energy to push for a retracement to .7900.
Event risks for this trade include the RBA interest rate decision, during which the central bank might shift to a more dovish tone. Most central banks with the exception of the Fed have already sounded more cautious in their recent policy statements and some have even pursued easing efforts in order to ward off deflationary pressures.
If the downtrend resumes, AUDUSD could head back to its previous lows around .7700 and perhaps go for new ones. On the other hand, if the RBA surprises with a hawkish statement, AUDUSD could pull up higher to the .8000 levels.
Facebook Shares in Range | Support at $74/Share
Facebook shares continue to move sideways as risk appetite has been on and off in the past few days. The latest FOMC statement indicated that the Fed is ready to hike rates sometime this year, weighing on most US equities, while the advanced GDP reading shows that the economy could rely on low rates for much longer.
Price found support at the $74/share level and continues to trade around the 50 simple moving average on its daily chart. For now the short-term SMA is moving above the longer-term 200 SMA, which suggests that the uptrend could resume at some point.
However, a downside break below $74/share could spark a test of the 200 SMA support around the $72/share level. A bounce off this zone could mean another set of rallies possibly until the broken support area. MACD is moving down, indicating that sellers are in control of price action.
RSI is on middle ground but also on its way down, confirming that further losses might be seen in the next few days. The upcoming NFP release could determine the direction of this stock later on, as strong data could lead to a pickup in risk appetite and a rebound for US equities.