Connect with us

Forex

FX Price Action Setups in EUR/USD, USD/CNH, USD/CAD and NZD/USD

Published

on


FX Price Action Setups in EUR/USD, USD/CNH, USD/CAD and NZD/USD

It’s been a busy week already and tomorrow brings an extra quotient of risk as US markets will be closed for an official day of mourning for former US President, George H.W. Bush. This means that the Jerome Powell semi-annual Humphrey Hawkins testimony that was set to begin on Wednesday has been postponed to a yet-to-be-named date; and the next major USD item on the calendar is Friday’s release of Non-Farm Payrolls data from the month of November.

The equity ramp that showed at the beginning of this week has now been completely faded-out, and prices in the Dow are dipping into territory that had come into play on the heels of Chair Powell’s speech last week. The US Dollar, meanwhile, has put in a bifurcated day of price action as weakness leading into this morning down to a key Fibonacci level has brought buyers back to the bid, and prices are now jumping towards an area of unfilled gap on the chart that runs up to around 97.19. In this webinar, I looked at price action setups around the US Dollar, focusing on major currency pairs in the effort of devising strategy.

Forex Talking Points:

– If you’re looking to improve your trading approach, our Traits of Successful Traders research could help. This is based on research derived from actual results from real traders, and this is available to any trader completely free-of-charge.

– If you’re looking for a primer on the FX market, we can help. To get a ground-up explanation behind the Forex market, please click here to access our New to FX Trading Guide.

If you’d like to sign up for our webinars, we host an event on Tuesday and Thursday, each of which can be accessed from the below links:

Tuesday: Tuesday, 1PM ET

Thursday: Thursday 1PM ET

US Dollar Bounces From Fibonacci Support

The US Dollar gapped-down to start this week’s trade and bears remained fairly-active on the open, continuing to push-lower without allowing that gap to fill-in. This led to a test of the bullish trend-line that’s been at work for the past couple of months yesterday morning, and that bounce also failed to fill-in the gap that remains from 94.04-94.19. Weakness continued to push into this morning, after which the 96.47 Fibonacci support level came back into play.

US Dollar Hourly Price Chart

us dollar hourly chart

Chart prepared by James Stanley

After a few hours of struggle, bulls were able to re-grab control to propel prices back to the 97.00 area. Unfilled gap remains, and the key here is monitoring how deeply bulls can drive. If the swing-high from last week is taken-out at 97.31, the scope for further upside is there, and the door could soon re-open to topside strategies in the US Dollar. If, on the other hand, that gap fills and then sellers hold resistance below this prior swing, the door remains open for short-side strategies, and that could be attractive in venues such as NZD/USD and USD/CNH.

US Dollar Four-Hour Price Chart

us dollar four hour price chart

Chart prepared by James Stanley

EUR/USD Streak of Higher-Lows Nears Trend-Line Resistance

From a number of vantage points, the past month has been relatively quiet in EUR/USD, as the pair has continued to build into a symmetrical wedge pattern.

EUR/USD Four-Hour Price Chart

eurusd four hour price chart

Chart prepared by James Stanley

On a shorter-term basis, the big question is whether bulls can continue to push after bringing-in a series of higher-lows over the past few weeks. Sellers remain active, as shown from last week’s resistance hold at 1.1400. But this week, prices were able to edge above that level, even if by a little bit, and this shows a potential shift in the balance-of-power in the pair, with sellers getting a bit more shy while bulls grow more anticipatory as indicated by higher-low support.

In the webinar, I discuss how to move forward with a formation such as the symmetrical wedge as shown below. Wait for the break to get a directional bias, and then look for a pullback to open the door for exposure potential on continuation strategies.

EUR/USD Two-Hour Price Chart

eurusd two hour price chart

Chart prepared by James Stanley

GBP/USD: Cable Flickers to Fresh Low as Brexit Continues in a Messy Manner

Next week brings the Parliament vote for Theresa May’s Brexit plan, and matters never really looked all that positive there. A blow may have been dealt before the vote ever takes place, and this showed up earlier today when UK Parliament found the government in contempt. So, the vote next week isn’t looking so positive.

As discussed by our own Martin Essex, this opens a series of options, including the potential for a new Prime Minister, which may turn out to be Pound-positive.

Nonetheless, the pair remains in a dangerous spot, as prices quickly set a fresh yearly low before pulling-back above the Fibonacci level that helped to set that support. This can be a difficult move to plot for continuation as prices still remain rather far away from nearby resistance swings.

GBP/USD Four-Hour Price Chart

gbpusd gbp/usd four hour price chart

Chart prepared by James Stanley

USD/CHF Builds Higher Lows with Parity Holding Resistance

I discussed this last week, but the prior theme of USD/CHF weakness doesn’t look as attractive after the support test at .9902 two weeks ago. Bullish breaks above parity could soon re-open the door for topside strategies.

USD/CHF Four-Hour Price Chart

usdchf four hour price chart

Chart prepared by James Stanley

USD/CNH to Two Month Lows as Yuan Reversal Gains Speed

I had looked at this one a month ago, essentially trying to catch a top as USD/CNH neared a key resistance level at 6.9875. It took a few weeks for the setup to show much attraction, but to open this week Yuan-strength has been back in the cards and this has helped to bring both targets into play. The bigger and more important question at this point: Is there more room to run on the downside?

USD/CNH was in a concerted up-trend from April into October, and if this theme does hold there may be more room to run.

USD/CNH Daily Price Chart

usdcnh daily price chart

Chart prepared by James Stanley

USD/CAD Finds Resistance at Prior Support

USD/CAD was in a strong and consistent up-trend leading into this week. The pair gapped-lower to go along with that move in DXY, and prices peeled below the bullish trend-line that’s been in place since the start of Q4. At this point, the zone that I had used for prior support is now helping to show short-term resistance, and this lines up with the under-side of that bullish trend-line. Similar to USD/CHF above, there may be a flip scenario taking place here, although it’s still in the very early stage. The remaining unfilled gap up to last week’s close around 1.3300 would likely need to be filled before short-side setups can become attractive.

USD/CAD Four-Hour Price Chart

usdcad four hour price chart

Chart prepared by James Stanley

NZD/USD Pulls Back from Fresh Five-Month Highs

It’s been a positive Q4 for the Kiwi since a difficult first nine months of the year. The month of October saw a build of support even as the US Dollar was jumping up to fresh yearly highs, and as soon as November opened along with some USD-weakness, NZD/USD was set to fly-higher on the chart. That theme of strength has largely remained since, with a couple of resistance inflections helping to show key areas on the chart. One of those areas that had held the highs on two separate occasions last week remains as support potential, and this runs from around .6870-.6877. In the webinar, I discussed a few options for working with that setup.

NZD/USD Four-Hour Price Chart

nzdusd nzd/usd four hour price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q4 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Forex

Dow Jones, DAX 30 and FTSE 100 Technical Forecast

Published

on

By


Dow Jones, DAX 30 and FTSE 100 Technical Forecast:

  • The Dow Jones faces considerable nearby resistance
  • The DAX 30 enjoys nearby trendline support, but must surmount a Fib level to press higher
  • To the delight of technical traders, the FTSE 100 will have to unravel two conflicting candlestick patterns

Dow Jones, DAX 30 and FTSE 100 Technical Forecast

Amid a whirlwind of trade war developments, equity markets across the globe had to negotiate significant volatility. After the S&P 500 posted its largest gap lower since 2009 on Monday, US equities had their work cut out for them – but were able to recoup most losses. In the days to come, equity markets will continue to struggle with the same themes. Expect technical levels to be strained, especially if volatility persists.

Dow Jones Technical Forecast: Bearish

The Dow Jones ended the week marginally lower than it closed the Friday prior. More importantly however, the Index resides beneath two nearby Fib levels – the 61.8% retracement from March to May at 25,775 and the 78.6% at 23,823. Each level will look to provide resistance early next week. If those levels are surpassed, the 50% level at 25,952 will come into play. The area rebuked prices multiple times last week and should play a similar role next week.

Dow Jones Price Chart: 4 – Hour Time Frame (February – May) (Chart 1)

DJI

How to Day Trade the Dow Jones

With considerable topside resistance, the Industrial Average will once again have its work cut out for it. If attempted rallies are curtailed, the 78.6% level around 25,523 may fortify prices. Beyond that, the 25,400 area should provide further buoyance, despite a break lower on Monday. The area marks March’s lows and provided moderate support last week.

DAX 30 Technical Forecast: Bullish

After a considerable surge last week, the German DAX seems to have its sights set on a continuation rally. Luckily for bulls, the 23.6% Fib level at 12,169 and an ascending trendline from December’s low will look to provide nearby support. The trendline previously marked the lower bound of the ascending channel the Index found itself in during the first-quarter rebound. Should the support hold, the channel may become pertinent once more.

DAX Price Chart: 4 – Hour Time Frame (April – May) (Chart 2)

DAX

Should the index continue higher, highs from last week – around 12,300, should pose initial resistance. Secondarily, the 61.8% Fib level at 12,331 will come into play. If both those levels are surmounted, subsequent resistance will be offered by the upper-bound of the channel and at 12,437 – the full extension of the Fib level from March’s lows to May’s highs.

FTSE 100 Technical Forecast: Bullish

The FTSE 100 closed Friday’s session to leave a perfect hanging-man candlestick on the daily chart. Although shorter time frames are typically better suited for weekly forecasts, the candlestick patterns are too clear to ignore. A hanging man candlestick at the top of an uptrend generally precedes a trend reversal, but what precedes the Friday candle may carry more weight.

FTSE 100 Price Chart: Daily Time Frame (February – May) (Chart 3)

UKX

Prior to the hanging man, the candlesticks from the Tuesday through Thursday sessions form three white soldiers – in this case green soldiers. This candlestick pattern offers a bullish signal, usually preceding further gains. With the conflicting candlestick signals, technical traders will have a lot to look for next week.

That said, the most likely outcome – in my opinion – is a brief retracement early in the week to fulfil the hanging man prophecy and to consolidate. In this scenario, the 23.6% Fib level at 7,296 would pose as critical support. Once the consolidation is underway, the three white soldiers may drive the FTSE 100 higher as the week progresses. For follow up on these technical patterns, or to ask any questions, follow @PeterHanksFX on Twitter.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more: Gold Price Plummets, Seeks Technical Support Near May Lows

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Looking for a fundamental perspective on Equities? Check out the Weekly Equity Fundamental Forecast



Source link

Continue Reading

Forex

S&P 500, DAX Fundamental Forecast

Published

on

By


Equity Analysis and News

  • S&P 500 | Trade War Tensions Dictating Price Action
  • DAX | EU/US Trade Dispute is Delayed, Not Resolved

FTSE

Source: Thomson Reuters, DailyFX

S&P 500 | Trade War Tensions Dictating Price Action

The S&P 500 is on course to drop over 0.5% for the week as investor angst over US/China trade wars continues to weigh on risk appetite, most notably in the US benchmarks. However, while a mid-week bounce has seen losses pared slightly since the escalation with the S&P 500 now down 3% (Prev. -5.4%), the trade sensitive sectors have maintained their losses with the US Semiconductor Index down 10% (Prev. -11%). Consequently, focus will continue to remain trade wars.

SPX

Markets Pricing in Fed Rate Cuts

The Federal Reserve have continued to maintain the mantra that they will be on hold for the foreseeable future and that there is little reason to provide a cut. However, bonds markets have continued to price in Fed easing, with money markets fully priced for a rate reduction in December. Alongside this, the 3M/10yr US yield curve has continued to dip into inversion amid the rising trade war tensions. The upcoming week will see commentary from Fed Chair Powell, however, with markets pricing in a dovish Fed, the bar is high for Powell to match those dovish expectations as was evidenced in the post monetary policy decision speech on April 24th, in which the Chair noted that soft inflation was “transitory”.

FED

Source: DailyFX, Thomson Reuters

DAX | EU/US Trade Dispute is Delayed, Not Resolved

A firm week for the DAX, which recorded gains of over 1%, among the major factors behind this had stemmed from source reports stating that the Trump Administration were to delay imposing auto-tariffs on EU imports for an additional 6-months (full story), which in turn saw the European auto names surge. The decision to delay could largely be attributed to the fact that US/China tensions have escalated. However, this is merely a delay and not a resolution. Noteworthy calendar events: ECB Draghi & Praet (Thurs), Eurozone PMIs (Thur).

DAX Price Chart: Daily Time Frame (Jan 2019May 2019)

DAX

RESOURCES FOR FOREX & CFD TRADERS

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

Looking for a technical perspective on Equities? Check out the Weekly Equity Technical Forecast



Source link

Continue Reading

Forex

Euro Weakness to Remain the Theme

Published

on

By


EURUSD Technical Highlights:

  • Euro looks headed towards the April low or worse
  • 4-hr chart has a developing structure to pay attention to

Check out the DailyFX Trading Guides page for intermediate-term forecasts, educational content aimed all experience levels, and more.

Euro looks headed towards the April low or worse

To be clear, trading EURUSD lately hasn’t been an easy endeavor as low volatility conditions continue to be a headwind for traders. We’ve seen some movement in other majors (GBPUSD in particular) but not in the most widely traded pair. That will eventually change, but until it does we have to continue to take what is presented to us and be patient with set-ups.

With that said, the general trading bias remains the same as it has for months – lower. Trend and price action continue to be supportive of this bias. A run on the April low at 11109 or worse looks to be in store sometime in the coming sessions, but the path could be a little shaky.

Dialing in a bit closer to the 4-hr time-frame, a channel is becoming visible even if it isn’t perfect, with candlestick wicks clouding the picture. A small bounce from the lower parallel may make for the best scenario, as the lower parallel’s importance is further cemented and a nearby low is created in the process.

A bounce and subsequent breakdown could offer a solid structure (see 4-hr chart) for would-be shorts from both a probability and risk/reward standpoint. Selling right here at support puts one at risk of a bounce with good stop placement difficult to determine.

A bounce that carries the euro beyond 11225 will give pause to sellers and bring into play the area around 12265 (recent highs/trend-lines) and possibly become an even more attractive spot to short. The bottom line is that the Euro looks headed lower, but it may pay to sit tight and wait for a better look before entering new positions. If currently in a short from higher levels, then one could use the aforementioned highs and trend-lines to manage risk accordingly.

Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move.

EURUSD Daily Chart (April low, 11000s could be soon)

EURUSD

EURUSD 4-hr Chart (Channel/Bear-flag)

EURUSD

Helpful Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX

Looking for a fundamental perspective on The Euro ? Check out the Weekly EUR Fundamental Forecast



Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.