NEW YORK (TheStreet) -- The euro/dollar downtrend continues.
Over the last two months, the exchange rate of the EURUSD has falling significantly lower, and as the monthly chart below shows us, there are no signs this downtrend is coming to an end any time soon.
This week, we are looking to trade in line with the dominant downtrend in this market by waiting for a price action sell signal on the daily chart time frame or four-hour chart time frame, following a retrace back to resistance. Key support levels are seen on the monthly chart down near 1.2750 and further below near 1.2050, and we wouldn't be surprised to see prices fall into these levels later this year.
Australian dollar/dollar drops down from resistance.
If the AUDUSD stays contained under near-term resistance up between 0.9400 - 0.9374 this week, we could see it fall lower, with the next key support not seen until down near 0.9200.
The U.S. dollar/Canadian dollar forms a fakey buy signal from support.
Last week, the USDCAD completed a 50% retrace of its last major move higher. It ended this retrace by forming a bullish fakey with pin bar buy signal. This fakey/pin bar combo signal is showing rejection of both the 50% level and support near 1.0820. Thus, if price remains buoyant this week, we could see it begin pushing higher from Friday's buy signal.
Gold weakness remains.
Gold retraced modestly higher last week, but overall we are still seeing a clear downtrend in place on the daily chart over the last month and a half. Last Friday, the price formed an inside bar setup, indicating that the recent retrace higher is stalling and losing momentum. If the price breaks down from Friday's inside bar this week, we could see the downtrend resume and lower prices to follow.
Copyright 2014 -- LearnToTradeTheMarket.com
At the time of publication, the author held no positions in any of the stocks mentioned. Nial Fuller
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.