The EURUSD has halted its four day advance during the overnight session; however, a change in sentiment may lead the euro to continue its northern journey in the short term. Indeed, I was short the pair from 1.3100, and decided to take profits today at 1.288. A couple things to take note of is the recent break and close above the 20-day moving average, which has held as a line of resistance since the second week of August. At the same time, my user defined parabolic SAR crossover illustrated a buy signal today. I may look to place a buy order to take advantage of this possible short term rally. However, as my overall bias for the pair is to the downside, I will probably keep this position open less than usual. Meanwhile, I remain short the GBPUSD from 1.54469 as price action is capped by the 50-day moving average. A clear break below 1.5354 will expose further downside risks towards pivot support at 1.5303; stop unchanged at 1.5550. This week, GBP traders await the Bank of England rate decision and the asset purchase target.
Nonetheless, the USDJPY remains bounded by the descending channel. Remain on the sidelines until a clear break and close above the 20-day moving average appears. Traders should caution entering into a position today as the currency markets may witness whipsaw price action as many traders in the U.S. are offline in observance of the Labor Day Holiday. Good luck trading!!! .
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