Business-Insider

From a technical perspective there is always something going on in the market. Besides the potential bottom I am looking for on the GBP/USD that I talked about last week, I see two more interesting formations or benchmarks on other pairs.

First, although I am very bullish on the AUD/USD we are creeping closer to the gap that appeared when the market broke down in mid-November. A break that includes a gap is a significant resistance zone. If the market returns to that level it has the potential of forming a "dead cat bouce." This pattern is completed when the market turns back around and reaches new lows after being turned back at the gap's resistance level. Another 150 pips and we are in the danger zone - definitely a pattern to watch.

Second, the USD/JPY seems to be consolidating and breaking out of a small flag pattern. The downside potential here may be the lows from November at least, however, I am watching for a potential breakdown in the S&P 500 below 1380 before I get too concerned.

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