Friday, October 10, 2014

The Fate Of The USD

So as we all know the FOMC will be meeting again to announce their almighty important notes and we traders need to be on out toes. I want to take the time to go over some of the most important currency pairs during these hours of waiting. In This report we'll cover the most traded USD pairs available, EURUSD GBPUSD, USDCAD, USDJPY, and AUDUSD.
GBPUSD: This pair has taken a turn towards the stars and looks like it could be reversing its current downtrend. Since July this pair has been steadily drifting lower and lower and reached a yearly low of 1.60000 which acted as support for some congested trading going back to...get this...October of last year...and also the 50% Fibonacci retracement price. On the daily chart below we can see the confluence in color.
After the first test of the low the pair sprang back up to 1.64000 where it was rejected and once again fell to and then below 1.60000 before is was pressed back up to 1.61585. On the hourly chart below we can get a closer look at how this pair has been performing with this weeks movements highlighted in blue. From 1.60000 the pair took a steady path up and actually rose above its resistance before it was pressed back below it. This tells me that the traders want prices above this and their only preparing the situation strategically; so should you. 
I would be looking to sell this pair from 1.61585 and buy it at 1.60000 keeping a close eye on it just in case the banks want to take the price a step lower to the 61.8% Fibonacci at 1.57000, another great place to buy. 

EURUSD: This Pair looks like a little more fun. It has taken its drop step by step, almost in perfect lock step formation as far as the 240min chart shows. We can see from the chart below that this pair has found some good support around 1.25500. From There it has been on a consistent march back up towards the 61.8% Fibonacci level it broke about a week and a half ago. It was rejected back down from there and ended up being supported just at 1.26650 which also acted as resistance on the way down. It's good to see the bank traders are respecting technical levels. 
I'd be looking to buy this pair from or near 1.26650 with some bias to the downside so watch your position with caution as this pair has been known to be hella volatile

USDCAD: Is a completely different beast. This pair has seen some serious congestion where traders are sending the price flying and falling all within 1 or 2 sessions. On a 60min chart we can observe that this pair is still being supported by its original up trend support line but it does look to be losing some steam as far as the bulls are concerned. Around 1.11600 would be the level I'd sell from IF I was going to make any trade. I don't see much more upside potential in this pair and I don't think the banks are ready to lower it out of its uptrend just yet (think manipulation
AUDUSD: Is another pair which looks to be turning its tides from being a seller to being a buyer. Over the past week we've seen the price hit its most recent lows only to pick up Monday with nothing but buyer behind it. Though this pair has been seriously volatile we can clearly see its upswing and potential for more bullish moves. Price us testing near term support around .87500 where we could see the price bounce and continue its uptrend. I want to see .88800 cleared before I step in for a buy only because of this pair history of volatility especially during odd hours. 
 And last but not least,

USDJPY: This pair reached awesome new highs and then....nothing. It's been so lackluster I wouldn't even suggest a trade if you're not already in a successful position already. If you are in a position I hope it's a long position and I would only suggest buying more while you have a chance before the hike towards 115.000 which probably won't take long considering all the stalling that's going on in the pair now. Below on a 60min chart we can see the consolidated trading of this pair. 

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