Analyst Picks

Walker England , Forex Trading Instructor

My Picks:  USD/CAD Pending Breakout
Expertise:  Technical Analysis
Average Time Frame of Trades:  1Day-1Week

Market Condition: USD/CAD Pending Breakout

Target 1:Bullish 1.3193 Bearish 1.2992

Target 2:Bullish 1.3260 Bearish 1.2925

USD/CAD, Daily Chart & Inside Bar

USD/CAD Pending Daily Breakout

(Created Using IG Charts)

The USD/CAD is set to conclude today’s session with the creation of an inside bar. Traders may elect to use last Friday’s high and low as a reference, and plan for a breakout later in the week. Bullish breakouts may be identified over Friday’s high of 1.3156. Alternatively, bearish breakouts may be identified under the low at 1.3059. The identified range measures 67 pips, and this value can be used to measure preliminary pricing targets. Half the value of the range may then be used to manage risk and create a 1:2 risk reward ratio.

In the event of a false breakout traders may elect to wait for further price action confirmation prior to reentering any positions. Alternatively, if the USD/CAD fails to breakout, traders may opt to trade further USD/CAD consolidation.

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

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See Walker’s most recent articles at hisBio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

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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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Jeremy Wagner, CEWA-M , Head Forex Trading Instructor

My Picks:  Short EUR/CAD
Expertise:  Elliott Wave, Technical Analysis
Average Time Frame of Trades:  2 Days - 2 Weeks

EUR/CAD touched the lowest exchange rate it has seen in over 19 months printing a low of 1.3784. The low from this morning came at an equal wave measurement from the January 23 high. That suggests today’s low is near an important level.

Though prices are rallying now, if prices do end up breaking below today’s low, we can use the price break to support a bearish bias.

We will be keeping an eye on Relative Strength Index as well. Currently it is depicting divergence that suggests we may see a bullish move. This is one reason why a breakout trade is selected. One benefit to breakouts is that you let the market dictate to you when it is ready to trade to new lows, in the case. If no new lows are created, then we are saved a losing trading on our bearish bias.

When trading a breakout of this nature, risk is placed just above the recent swing high. We will manually trail the stop a price drop accelerates.

If you wish to join Jeremy in his US Opening Bell webinars to discuss this market, register and join here.

EUR/CAD Punches Lowest Level in 19 Months

Created using TradingView

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

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Tyler Yell, CMT , Forex Trading Instructor

My Picks:  Bearish EUR/AUD
Expertise:  Technical Analysis, Global Macro, Intermarket Analysis, & Elliott Wave
Average Time Frame of Trades:  2-5 Weeks

Point to Establish Short Exposure: Short on Retracement to 1.39/40

Spot: 1.3823

Target 1:1.36628 Intraday Low of 2015

Target 2:1.35094 61.8% Retracement of 2012-2015 Price Range

Invalidation Level:Close above 1.4100, 61.8% Retracement of Feb. Range

Highlights:

-AUD Remains 2017 Strongest G8 FX Currency As EUR Sits On Bottom

-Geopolitical Risk Grows With Upcoming Elections Putting Further Strain On Euro

-Commodity Bull Market In Precious Metals Keeps Wind At AUD’s Back

Fundamental & Technical Focus:

EUR/AUD has been on a steady downtrend, and the recent developments show that the trend could continue. On the Intermarketanalysis front, Australia seems to be well positioned to gain afurther economic advantage as the commodity market, specifically in precious metals continues to move ahead while others like energy have appeared to stall for now.

The Australian economy sits at a favorable position due to recent comments from the RBA as the RBNZ has recently talked down their currency and recent hints of economic growth in China seems to benefit Australia as well. RBA’s Lowe recently communicated that he appears comfortable with the level of AUD right now despite the relative strength, which should lessen central bank interference in the trend.

The Australian dollar has been the best-performingcurrencyacross the board in 2017 thanks in large part to the ‘Great Reflation’ that has a viewpoint of pending inflation, which benefits commodity exporters like Australia. Many have looked at Copper futures, which have recently broken above the early November highs evidence of the breakout and Bullish Momentum in Copper. In 2017, The Australian Dollar has gained nearly 5.9% against the US Dollar and 5.35% against the EUR.

Euro, on the other hand, has had a difficult time holding a bid despite some evidence of Economic resilience. After Janet Yellen’s testimony to Congress on Tuesday in which she said it would be “unwise” for the Fed to wait to hike rates, EUR/USD and other EUR crosses hit a 1-month low. This move coincided with a steepening in the Euro area bond yield curve.

This trade of EUR/AUD short would look to enter on a retracement, so a sign of temporary EUR strength or AUD weakness. The preferred zone would be the 38.2% Fibonacci Retracement of the recent move lower that would have an entry point starting near 1.39 up to 1.4000.

EUR/AUD is also looking to take advantage of the Strong/ Weak Relationship:

Please add a description for the image.

The downside targets would favor new 2017 lows toward the Intraday low of 2015 at 1.36628 or the 61.8% retracement of the 2012-2015 range at 1.35094. While aggressive targets, the trend continuation view would place these levels as high priority and higher probability targets should the geopolitical risk rise further in Europe with upcoming elections in Netherlands and France along with ECB remaining dovish.

Chart:

Bearish EUR/AUD on Strong/Weak Relationship & Respect of Resistance

Created by Tyler Yell, CMT

---

Shorter-Term EUR/AUD Technical Levels: February 14, 2017

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

Bearish EUR/AUD on Strong/Weak Relationship & Respect of Resistance

-Tyler Yell, CMT

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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 slides to two-month low vs. Yen, short position hits first target
  • Partial profit taken, remaining exposure in play to capture down trend

The Euro accelerated lower against the Japanese Yen after over a month of sideways drift within a choppy congestion range, hitting the lowest level since early December. The move may suggest prices are finally ready to make good on a break of rising trend line support set from early November.

Near-term support is now at 119.49, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis seeing the next major downside barrier marked by the 23.6% level at 116.66. Alternatively, a move back above support-turned-resistance at 120.54 (January 17 low) target a falling trend line now at 123.13.

A short position was activated at 122.65 when prices initially took out trend line support. The trade has now hit its initial objective at 119.77 and profit has been taken on half of open exposure. The rest remains in play to capture any follow-on weakness with a stop-loss adjusted to the breakeven level.

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

Euro Drops to 2-Month Low vs. Yen, Short Trade Hits First Target
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