My focus chart during today’s trading will be the Aussie/Yen cross rate or AUD/JPY.

The 240-minute chart below, captured during late morning trading in Europe, shows that the rate is just hanging on above a key trend line. The 81.80 level which I had targeted a couple of weeks ago was fulfilled within the last few sessions and, subject to validation by a clear violation of the upward trend line, the suggested posture would be to remain patient for a clear directional move, but when it comes there could be a lot of momentum behind it.




The S&P 500 reached 1168 in yesterday’s trading which is tantalizingly close to the 1170 target level which this index still needs to overcome to regain the levels seen before the May 6 plunge.



The Nikkei 225 was closed for a public holiday on Monday but in Asian trading Tuesday the continued strength of the yen produced the predictable selloff. A red trend day with a fall of more than two percent can also be seen in the larger context of a failure to break above the trend line drawn which coincides with the 200-day EMA.

We shall have to see whether the Chinese are still intent on subverting efforts by the BOJ to weaken their currency.



EUR/USD is also fairly critically poised at the juncture of a major trend line on the 240-minute chart.

The $1.38 level still appears to be a pivotal level in the near term but should that go then the next target would be $1.3650 followed by a potential drop back to the $1.33 level where there is firmer chart support.




Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.