Analyst Picks

David Song , Currency Analyst

My Picks:  Bearish AUD/JPY
Expertise:  Fundamental and Technical
Average Time Frame of Trades:  2 - 10 Days

The near-term advance in AUD/JPY appears to be getting exhausted, with the pair at risk of resuming the downward trend carried over from late-2014 as it appears to have made another failed attempt to break the 200-Day SMA (80.14).


AUD/JPY Daily Chart

With market attention turns to the key developments coming out of Australia, a series of dismal data prints accompanied by dovish rhetoric out of the of Reserve Bank of Australia (RBA) may drag on the local currency especially as the central bank anticipates the low-inflation environment to ‘remain the case for some time.’ In contrast, the Bank of Japan (BoJ) may stay on the sidelines as Governor Haruhiko Kuroda and Co. assess the impact of the ‘yield-curve control’ dynamic for its quantitative/qualitative easing (QQE) program, and the near-term weakness in the Japanese Yen may largely unravel should the central bank endorse a wait-and-see approach for the remainder of the year.

With that said, AUD/JPY stands at risk of facing increased volatility going into the slew of interest rate decisions lined up for November, and the recent developments in the Relative Strength Index (RSI) casts a bearish outlook for the exchange rate as the oscillator fails to retain the bullish formation carried over from the previous month. In turn, it may only be a matter of time before price follows the RSI, with a break/close below 78.60 (61.8% expansion) opening up the next downside target around 77.90 (38.2% retracement) followed by the Fibonacci overlap around 75.80 (23.6% retracement) to 76.10 (38.2% expansion).

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--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

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Michael Boutros , Currency Strategist

My Picks:  Near-term Setups in DAX, AUDNZD, USDCAD & EURJPY
Expertise:  Short-term Technicals
Average Time Frame of Trades:  1-2 Days

DAX Daily

DAX Daily Chart

The DAX is testing key resistance today at 10688-10730 - a region defined by the 2016 open and the yearly high-day close. Note that basic trendline resistance extending off the August high also converges on this range over the next few days. I highlighted this setup last week and our outlook / levels remain unchanged. Key support now rests at with the lower median-line parallel / weekly low at 10488. A breach of the highs targets 10953/83.

AUDNZD- The pair turned just ahead of a key long-term inflection slope late-last week and the pullback we warned about earlier in the week has materialized. Levels / Outlook remain unchanged and the immediate focus is still lower while below the 2016 open at 1.0663 with more significant support eyed at 1.0552.

USDCAD- The post-BoC rally is approaching key near-term resistance & bearish invalidation at 1.3254 where the upper parallel converges on the July highs. If USDCAD is going to move lower, this is where we should look for some resistance. Levels highlighted here earlier this week.

EURJPY- The ECB charged a rally that reversed right off our key resistance / bearish invalidation level at the weekly open 114.46. Levels / Outlook unchanged from yesterday.

For additional insights on these setups, including analysis of intraday, daily, weekly and monthly charts, exclusive webinars, Twitter updates, and specific trade plans, subscribe to SB Trade Desk (click here for more info).

Looking for more trade ideas? Review DailyFX’s 2016 4Q Projections

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

Follow Michaelon Twitter @MBForex contact him at or ClickHere to be added to his email distribution list

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Walker England , Forex Trading Instructor

My Picks:  GBP/USD Pending Breakout
Expertise:  Technicals
Average Time Frame of Trades:  1 Day - 1 Week

Market Condition: GBP/USD Pending Breakout

Target 1: 1X RangeBullish 1.2656Bearish 1.1804

Target 2: 2x RangeBullish 1.2940Bearish 1.1520

Invalidation: Continued GBP/USD Consolidation; False Breakout

GBPUSD Price Daily Chart

GBP/USD Pending Breakout

(Created using Tradingview Charts)

The GBP/USD has failed to make a significant high or low for the last seven sessions, allowing traders to plan for an inside bar breakout. When using the October 11 daily candle as a reference, current support for the pair is found at 1.2088 and resistance at 1.2372. Knowing this, traders may plan for a breakout either below or above these values respectfully. The distance between support and resistance measures 284 pips and this value may be used to extrapolate initial breakout targets.

This includes bearish targets near1.1804 and bullish targets near 1.2656.

In the event of a false breakout, traders may consider using half the distance of the range to create an initial 1:2 Risk/Reward ratio. Traders should also remember that the GBP/USD might maintain its current trading range. In this scenario, traders may elect to leave pending entry orders for a breakout, or trade the developing range in prices.

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Jamie Saettele, CMT , Sr. Technical Strategist

My Picks:  pending NZD/CAD short
Expertise:  Technical
Average Time Frame of Trades:  Swing

In September, NZD/CAD traded to its best level since 1997. The rate has drifted lower since. The pattern since March 2014 is a head and shoulders continuation pattern but the September weekly reversal warns that the breakout to nearly 20 year highs is a 'fakeout' and that the pattern could fail. Near term I'll watch for resistance near .9520 (trendline and 50% retracement). The short side would be viable if price responds to that level.

For more ideas and anaysis, please visit SB Trade Desk.


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James Stanley , Currency Analyst

My Picks:  Long EUR/JPY
Expertise:  Price Action + Macro
Average Time Frame of Trades:  Few Hours - Few Days


We discussed the technical context behind this setup in yesterday’s article, Old Trend-line Resistance, New Support. Since that article was published, we got another test of the projected trend-line, opening the door for top-side continuation entries.

Stops on the position can be set below the confluent batch of prior support and the previous price action swing low at 112.00. At the 115.37 level, stops can be adjusted to break-even, with top-side targets set at 117, 118.40, and then 119.90.


Chart prepared by James Stanley

--- Written by James Stanley, Analyst for

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