Analyst Picks

Ilya Spivak , Sr. Currency Strategist

My Picks:  Holding Short EUR/JPY from 122.65
Expertise:  Global macro
Average Time Frame of Trades:  1-6 months

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Talking Points:

  • EUR/JPY Strategy: Holding short from 122.65
  • Euro selloff accelerates as prices hit three-month low vs. Japanese Yen
  • Sellers now appear poised for a test of support below the 117.00 figure

The Euro looks vulnerable to deeper losses after declining to the lowest level in three months against the Japanese Yen after prices broke chart support. The pair has fallen for four consecutive days, making for the longest losing streak in six weeks.

From here, a daily close below the 23.6% Fibonacci expansion at 116.66 opens the door for a test of the 38.2% level at 112.06. Alternatively, a reversal back above the 14.6% Fib at 119.49 – now recast as resistance – sees the next upside barriers at 120.05 (falling trend line) and 121.14 (support-turned-resistance shelf).

A short trade was triggered at 122.65 and profit was booked on half of initial exposure when prices hit the setup’s first objective. The rest of the position continue to be in play, looking to capture any follow-on weakness. The stop-loss has been trailed to the breakeven level.

Why is EURJPY a top trading idea for 2017? See the fundamental strategy here.

Euro Selloff Accelerates vs. Yen as Prices Hit 3-Month Low
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Walker England , Forex Trading Instructor

My Picks:  EUR/JPY Pending Breakout
Expertise:  Technical Analysis
Average Time Frame of Trades:  1 Week-1 Month

Market Condition: EUR/JPY Pending Breakout

Target 1: 115.27

Target 2: 111.95

EUR/JPY, Daily Chart with Yearly Low

EUR/JPY Pending Bearish Breakout

(Created Using IG Charts)

The EUR/JPY has found support after declining as much as 526 pips so far for the 2017 trading year. As prices rebound from yearly lows at 118.59, traders may plan for the markets next bearish breakout. To do so traders may place entry orders to sell the market beneath the low, and use a daily ATR value of 83 pips to pinpoint stop and limit order placement. Traders may consider managing risk using 2X daily ATR, placing stop orders near 120.25. With 166 pips of potential risk, traders may consider a 332 pip profit target towards 115.27. This would create an initial 1:2 Risk/Reward ratio for a bearish breakout.

In the event that prices fail to breakout to new lows, traders may elect to simply delete any pending entry orders to sell the market. If prices do trade above 120.25, this would suggest that market momentum has at least temporarily changed for the EUR/JPY. In this bullish scenerio, traders may elect to wait for a broader retracement and further technical confirmation prior to initiating any new sell based positions.

--- Written by Walker, Analyst for DailyFX.com

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See Walker’s most recent articles at his Bio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

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James Stanley , Currency Strategist

My Picks:  Short AUD/USD
Expertise:  Price Action, Macro
Average Time Frame of Trades:  few days - few weeks

Aussie Fade

- If you’re looking for trading ideas, check out our Trading Guides. And if you’re looking for ideas that are more short-term in nature, please check out our Speculative Sentiment Index (SSI) Indicator.

This setup is designed to play the longer-term range in AUD/USD that’s been showing over the past ~ year (shown below):

Short AUD/USD at Market

Chart prepared by James Stanley

On the shorter-term setup, price action has just recently run-in to this zone of resistance, finding sellers last week on the first re-approach about .7725. Prices have tested that level again this morning, but of recent buyer motivation appears to be waning, as can be seen via RSI divergence on Daily chart below:

Short AUD/USD at Market

Chart prepared by James Stanley

This can allow for stops to be set atop the range at approximately .7870 to take on approximately ~150 pips of risk. This could allow for an initial target at .7565 to get a better than one-to-one risk-reward ratio. If this level comes in-play, stops can be adjusted to breakeven as deeper targets are sought at .7450, .7325 and finally to .7250 in order to clear out the majority of the position before that confluent support level at .7200 comes back into-play.

Short AUD/USD at Market

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

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Contact and follow James on Twitter: @JStanleyFX

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Jamie Saettele, CMT , Sr. Technical Strategist

My Picks:  Short USD/SEK against 9.0300
Expertise:  Technical
Average Time Frame of Trades:  Swing (few days+)

I don't think that the USD is ready to accept its beating just yet but the USD/SEK chart screams high reward/risk on the short side. The underside of former trendline support has provided resistance the last 2 weeks and a key reversal formed yesterday (2/22) following a poke above the 1/19 high. Worth a shot.

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Check out the DailyFX trading guides and webinars for ideas and education.

USD/SEK Daily

Please add a description for the image.

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Michael Boutros , Currency Strategist

My Picks:  Near-term Setups in DXY, NZD/USD, EUR/NZD & AUD/USD
Expertise:  Shot-term Technicals
Average Time Frame of Trades:  1-2 Days

DXY 120min

DXY 120min Chart

DXY: The index has been trading within this ascending formation off the February low with this recent decline eyeing a key confluence support region just lower at 100.20- a region defined by the 61.8% retracement of the monthly advance, the lower median-line parallel of the ascending structure and the 100-day moving average. I’ll be looking for signs of exhaustion / long-entries on a drop into this region with a rally back above 101 needed to clear the way for the next leg higher. I’m curbing my expectations for the dollar here as far as trend and think we could see a little more chop. That said, the near-term outlook remains constructive while above 100.20.

NZDUSD 120min

NZDUSD 120min Chart

NZDUSD: One last thrust higher before turning over? Look for resistance at 7255-7283 – with my focus weighted to the downside while within this formation. A break back below the weekly open targets support objectives at 7180 & 7130/43.

EURNZD: Heading into New Zealand retail sales figures this afternoon, I’m generally looking to fade weakness while above the 1.47-handle with key near-term resistance at 1.4783 – we’ve already seen a reaction off this mark today in U.S. trade. Highlighted this setup in today’s Scalp Report.

AUDUSD: Daily divergence into the highs highlights the risk for a near-term pullback but the trade remains constructive while above the monthly open (7570/83). Levels / outlook remain unchanged from earlier this week. Latest AUDUSD Update (2/15)

Looking for trade ideas? Review DailyFX’s 2017 1Q Projections

---Written by Michael Boutros, Currency Strategist with DailyFX

Join Michael for Live Weekly Trading Webinars on Mondays on DailyFX at 13:30 GMT (8:30ET)

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.

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