Google Surge, USDJPY Downturn Ahead this Tuesday
USDJPY Triangle Breakout Pullback | Support at 118.00 Level
USDJPY just broke above the resistance of the descending triangle pattern on its 1-hour time frame but it looks like buyers are running out of steam. A retracement to the broken resistance level could be in order, as price is retreating from its recent highs near 119.00.
Stochastic is pointing down, confirming that sellers are in control of price action for now. Stronger selling momentum might even lead to a test of triangle support around the 116.00 major psychological level, but a quick return in buying pressure could lead to a bounce off the current 118.50 levels.
If a bounce does take place, another test of the 119.00 resistance is possible and perhaps a move until the previous highs at the 121.00 might be seen. There are no major catalysts from both the US and Japan today, indicating that a bit of sideways movement might be possible.
The path of least resistance is still to the upside as the latest US jobs release showed more signs of strength and supported the FOMC’s hawkish bias. Meanwhile, data from Japan has disappointed, as the tertiary industry index printed a surprise 0.3% decline instead of the estimated 0.1% uptick.
EURNZD Rising Channel Breakdown | Next Support at 1.4800
EURNZD had previously been trading inside an ascending channel on its 1-hour forex chart but recently broke below the range support. This suggests that the pair could be in for a downtrend in the coming days.
Zooming out to the longer-term time frames shows that the next support area is located at the 1.4800 level, which might be broken if the pair undergoes stronger selling pressure. After all, talks of a Greek exit from the euro zone have dominated the headlines and might lead to more concerns about the region’s debt situation.
Meanwhile, the RBNZ has recently indicated a shift to a less hawkish bias but the country’s jobs report suggests that the economy might continue to stay resilient. The pickup in commodity prices and risk appetite has also supported the higher-yielding Kiwi so far.
There are no event risks lined up from both the euro zone and New Zealand for the rest of the week, which means that current trends could carry on. The path of least resistance appears to be to the downside since the New Zealand economy is faring much better compared to the euro zone.
GOOG Shares Consolidation Pattern | Potential Upside Breakout
GOOG shares are currently moving sideways on the short-term time frames, as a symmetrical triangle pattern can be seen. This is located right around the 50 simple moving average resistance on the daily time frame, although a potential upside breakout could take place.
US equities have been doing better in the past few days, as risk appetite has picked up. Even though the jobs release spurred talks of Fed tightening and potentially weaker spending and revenues for businesses, the strong performance of the US economy has been enough to boost stock indices lately.
An upside break from the triangle consolidation could mean more gains for GOOG shares, especially if the price is able to move past the 200 long-term SMA resistance. For now, the short-term 50 SMA is still moving below the 200 SMA, which means a continuation of the downtrend is possible.
MACD is almost in the overbought zone, which could indicate a return in selling momentum. If that happens, a retest of the $500/share support level might be in the cards. An upside move, on the other hand, could last until the $550/share level. RSI is on middle ground but is pointing down, also suggesting that sellers could keep gains in check.