David Long

Euro on Edge

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Forex Market News Daily

Not much out in the way of headlines overnight so the markets were left to their own designs, so the stocks took off in the US, making further new highs in the S&P with the Dow up +1%. Oil and gold also ran whilst the VIX indicator, bond yields and copper fell. The only thing of note out there is that bets on the ECB adding monetary stimulus next week has the euro on edge, plus the Yuan continues to weaken in biggest move against it in years after the PBC lowered its “pegged rate”. It seemed that cash flow was out of greenbacks overnight and looking for better yields elsewhere.

DATA HIGHLIGHTS TODAY – US House prices composite & Consumer Confidence.

AUDUSD – Bank Of America put a buy notification on the Aussie out overnight and so we have a bullish engulfing bar off the 50ema and the right shoulder of an inverse head and shoulder pattern now looks formed. Whilst fundamentally I am bearish the Aussie, the price action in last week is decidedly setting up for a bull run. A break through 9085, then retest would have me join that bandwagon, until then though I will remain on the sidelines.
Resistance: 9085/9167/9300
Support: 8654/8550/8300

EURUSD – A HHHL yes, but looking like it will form a test bar, closing slightly below the midpoint from the high and low. This doesn’t give us much of a clue as to direction. Would prefer to see a minor pullback to the average, thereby giving us a complete cycle, then get busy buying.
Resistance: 13733/13830/14065
Support: 13488/13420/13266

GBPUSD – LHLL which is indicative of the data flow and headlines that the UK is slowing down, but price action is strong to bullish. As it is still mid phase it is a matter or wait and see for the moment.
Resistance: 16785/1.69/1.70
Support: 16300/15950/15830

NZDUSD – A bullish engulfing bar, and if one was looking for a buying opportunity because they believed that the kiwi will rally then we now have a cycle above the ema with bullish price action and you could argue a trade here that might break or test October 2013 highs.
Resistance: 8400/8475/8535
Support: 8090/7925/7714

USDCAD – A snap reversal bar without divergence. Still cannot identify an opportunity.
Resistance: 11170/11233
Support: 10859/10715

USDJPY – Now a LHLL but a buyer test bar. Still see yen weakness ahead.
Resistance: 105.57/108.35/110.50
Support: 100.62/100/99.80

GOLD – Up she runs $20 bucks. A test of 1350 would be ideal shorting opportunity with divergence in all momentum indicators showing us that the buying is weaker up here.
Resistance: 1,350/1427/1480
Support: 1,265/1,180/1,040

AUDCAD – Working its way higher but no sign of exhaustion to indicate a reversal anytime soon.

AUDCHF – An engulfing buyer to bullish bar, in other words, a nothing day today.

AUDJPY – Same, but worse, both ema’s are flat.

AUDNZD – Price action like this is a sure sign of lack of commitment to a direction as it tracks along the ema.

AUDSGD – Same as the AussieDollar

EURAUD – A bearish engulfing bar and back to the ema and trend line. Nothing to see here.

GBPAUD – Last three bars were dominated by sellers but it hasn’t gone far at all, so not much commitment by them really.

EURCAD – A zone of resistance b/w 1.52 & 1.53 has seen this produce a swing high. Ideally I would prefer to see momentum divergence on this last little leg, but it is diverging from Jan highs, therefore a phase 2 trade is available, albeit I would not be putting more than ¼% of capital at risk on this one. The risk to rewards is 180 to 280 so slightly better than 1:1.5.

EURGBP – Technically is making LHLLs in each cycle, although it didn’t get into the extension zone at last end of phase 1. However, a LHLL tomorrow morning could well see a trade for Wednesday.

EURJPY – Inside doji bar, lack of decision, stay patient and do nothing.

EURNZD – Messy and avoid.

GBPCAD – Like the eurcad it has a swing high off resistance. Unlike the eurcad, there is momentum divergence on the most immediate leg up.

GBPCHF – Quiet difficult for me to see what is happening here.

GBPJPY – buying buying, selling, buying and price is still at the same level as last week.

GBPNZD – Failed to make a HH in the cycle. Will most likely trade sideways now.

CADJPY – A ring low of minor support at 92. I still see it as a range trade, despite the 50ema recently crossing the 200.

CHFJPY – An inside seller bar, do nothing day.

NZDJPY – Same as audjpy, going nowhere fast.

USDCHF – Some divergence in RSI is throwing me on this one, could be the phase 1 is over, would need a HHHL to confirm tomorrow.

CADCHF – Like EURCAD, it is effectively the same trade, there is a potential long trade today.

USDSGD – A reversal bar and if you are long, I would be moving stops in tight. It is also a swing high after a mini cycle under the ema, having said that I would not be looking to sell this pair.

USDZAR – After the reversal bar which should have stopped us out we get a nasty bearish bar. Wait and see what will happen here now.

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