Analyst Picks

Paul Robinson , Market Analyst

Paul Robinson
My Picks:  EURUSD & USDCAD
Expertise:  Technical
Average Time Frame of Trades:  Several days to several weeks

Struggling right now? It happens to the best. Check out these four core ideas to help boost your Confidence as a Trader.

EURUSD trend-line resistance puts it at risk of turning lower

Thus far this year, the Euro, during these times of unusually low volatility, has seen each rally and sell-off reversed, and until this pattern shows signs of changing I will continue to run with this sequence as the overarching theme to work with.

With that said, if the sequence is to continue then we should see EURUSD turn lower again soon. There is trend-line resistance of a couple of degrees which could put in a top. From here up to the 11380s or so should prove to be problematic.

A convincing turn lower in momentum will be needed for a high conviction set-up. Once a turn lower develops, if one does indeed develop, then the high of the candlestick will be used to determine stops for trades back down to sub-11200 where a few lines of support intersect.

What will bring pause to the continuation of the multi-month sequence, is if we either a.) see the Euro rip through resistance or b.) pull off from it, but hold and then breakout on through. This would be reason to flip the script on how to approach the Euro.

Looking for Trading Forecasts and Education to assist you in your trading? We’ve got you covered on the DailyFX Trading Guides page.

EURUSD Daily Chart (t-line resistance)

EURUSD daily chart, t-line resistance

USDCAD testing neckline of inverse head-and-shoulders pattern

USCAD charged through the neckline of an inverse head-and-shoulders pattern on March 5, but is now in full ‘neckline retest’ mode. A low may have been posted last week at 13286. It’s the first low I’m using as a reference point, but should we see one more jab lower and recovery, that could make for a new low from which to place stops during the retesting process. On a move higher from here the January 2016 trend-line and the December 31 high at 13664 will be targeted.

USDCAD Daily Chart (Retesting neckline of inverse H&S)

USDCAD daily chart, retesting neckline of inverse H&S

***Updates will be provided on these ideas and others in the trading/technical outlook webinars held on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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James Stanley , Currency Strategist

James Stanley
My Picks:  USDCAD, USDJPY, USDCNH, AUDUSD
Expertise:  price action, macro
Average Time Frame of Trades:  few days - few weeks

FX Setups for the Week of March 18, 2019

Forex Talking Points:

- DailyFX Quarterly Forecasts are available directly from the following link: DailyFX Trading Guides, Q1 Forecasts.

- For trading ideas, please check out our Trading Guides. And if you’re looking for something more interactive in nature, please check out our DailyFX Live webinars.

- If you’d like more color around any of the setups below, join in our live DailyFX webinars each week, set for Tuesday and Thursday at 1PM Eastern Time. You can sign up for each of those sessions from the below link:

Tuesday: Tuesday, 1PM ET

Thursday: Thursday 1PM ET

Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator.

End of Q1 Nears, FOMC on Deck for Next Wednesday

The end of Q1 is near with but two weeks of trade remaining before the door opens to Q2. It’s been an interesting outlay for a number of reasons, key of which is the return of the risk trade as the Fed shifted into a more moderate stance following the troubling equity sell-offs in Q4. This carried impact through the FX market, as an early-year surge of Yen-strength soon took a backseat to prior themes of Yen-weakness. This has helped USDJPY to put in a respectable showing so far in Q1, and this keeps the door open for further topside as the Q2 open nears.

The big item for next week is the FOMC rate decision on the calendar for Wednesday. There are minimal expectations for any adjustments or signals of adjustments to rates. The big topic of interest will be the balance sheet and how the Fed will look to continue with run-off, focusing on what the FOMC anticipates as the composition of the portfolio once they’re finished with Quantitative Tightening.

Below I look into four US Dollar price action setups designed for next week’s trade.

Bullish USDJPY on Hold Above 110.70

While the US Dollar has found a few different setbacks over the past week, highlighted by last week’s NFP report that helped to push DXY off of a big resistance level, USDJPY has held up fairly well. This highlights how a weak US Dollar hasn’t been as weak as the Japanese Yen, and this is a theme that shouldn’t be foreign to FX traders as Yen-weakness has continued to carry a strong correlation to risk-on market themes. The opposite theme has held true as well, with Yen-strength becoming of interest as risk-aversion themes have taken-hold across global markets.

This can keep the pair in an attractive spot for strategies built-around USD strength. The pair has thus far struggled to maintain above the 112.00 level, so traders would likely want to incorporate either an initial target or a break-even stop move upon a re-test of that level. A bit-higher is another potential area of resistance at 112.34, and this could function as either an initial target (if 112.00 is being used for a break-even stop move) or a secondary target.

USDJPY Eight-Hour Price Chart

usdjpy usd/jpy eight hour price chart

Bearish USDCNH on Hold Below 6.7400

On the other side of the US Dollar, USDCNH remains of interest. I began looking for a reversal in the pair last November as USDCNH tip-toed up towards prior highs. Given the backdrop, with the US-China trade dispute going along with an intense focus on currency-devaluation from President Trump, it didn’t seem an opportune time for the PBoC to allow for a top-side breakout in USDCNH which would likely garner considerable attention.

Since then, the Yuan has been guided-lower and prices have been confined to a bearish channel. I began looking at additional short-side setups coming into this week, and the first target was hit fairly quickly before prices bounced-up to prior resistance. With prices still adhering to this bearish channel, the door can remain open for more. The same initial target as last week may remain of interest around 6.7000 and, a bit-lower, secondary targets remain of interest around the 6.6750 area.

USDCNH Daily Price Chart

usdcnh usd/cnh daily price chart

Bullish AUDUSD on Hold Above .7000

Also on the side topside of USD-weakness is the of AUDUSD, which I had looked at last week on the basis of support holding above the key psychological level of .7000. While there isn’t much around the Australian economy to get excited about at the moment, the currency has had a difficult time trading below .7000, historically speaking. There have been a few instances of as such, most recently around the open of this year’s trade; but each time buyers have pushed prices back-above, giving rise to the continued defense of that level outside of any exogenous shocks. Last week saw the .7000 level come into play but buyers responded before bears could test-below, and this was somewhat of the basis for including this market in last week’s FX Setups.

For next week, the potential for further gains remains as the pair holds near weekly highs. Above current prices, the prior zone of interest around .7125-.7150 remains, and the long-term zone of support/resistance remains from .7185-.7206, which could function as topside targets accompanied with a break-even stop move.

AUDUSD Four-Hour Price Chart

audusd aud/usd four hour price chart

Bearish USDCAD on Hold Below 1.3470

I had looked into this setup in yesterday’s webinar, highlighting this specific zone of resistance for the potential re-opening of bearish strategies. Earlier in the month of March I had looked at bullish reversals in the pair, largely using an Oil proxy as WTI had just run into a key level of resistance. That resistance held and didn’t come back into play until this week when buyers posed a brisk topside breakout. At this point, WTI has pulled back to find support in that prior zone of resistance, and this can keep the focus on the long side of Oil which can, in-turn, keep the long side of the Canadian Dollar of interest.

WTI Crude Oil: Support Bounce From Prior Breakout Resistance

WTI Crude Oil Four Hour Price Chart

Initial targets could be sought around the prior zone of 1.3236-1.3259, at which point break-even stop moves can be investigated. Secondary targets could be sought at the same level that was used for support earlier this month, around the 1.3132 Fibonacci level; and if traders did want to look for a larger down-side move, the 1.3066 level lurks just-below that.

USDCAD Four-Hour Price Chart

usdcad usd/cad four hour price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a plethora of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

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

Contact and follow James on Twitter: @JStanleyFX

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David Song , Currency Analyst

David Song
My Picks:  Bearish EUR/USD
Expertise:  Fundamental and Technical
Average Time Frame of Trades:  2 - 10 Days

EUR/USD retraces the sharp selloff following the European Central Bank (ECB) meeting as recent data prints coming out of the U.S. highlight a slowing economy, but the recent rebound in the exchange rate appears to be sputtering ahead of the Federal Reserve interest rate decision on March 20 as it fails to extend the series of higher highs & lows from earlier this week.

The U.S. dollar struggled to hold its ground as updates to the U.S. Consumer Price Index (CPI) showed an unexpected downtick in both the headline and core rate of inflation, and signs of subdued price growth may encourage the Federal Open Market Committee (FOMC) to endorse a wait-and-see approach throughout 2019 as Chairman Jerome Powell warns that ‘some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe.’

Image of federal reserve interest rate forecast

In turn, the FOMC may face accusations of committing a policy error after implementing four rate-hikes in 2018, and the central bank may have little choice but to wind down the $50B/month in quantitative tightening (QT) over the coming months especially as ‘several participants judged that risks that could lead to higher-than-expected inflation had diminished relative to downside risks.’ With that said, the updates to the Summary of Economic Projections (SEP) may show a further reduction in the growth and inflation forecast, but it remains to be seen if Chairman Powell & Co. will adjust the interest rate dot-plot as a growing number of Fed officials show a greater willingness to abandon the hiking-cycle.

With that said, a material change in the Fed’s forward-guidance may produce headwinds for the U.S. dollar, but the recent rebound in EUR/USD appears to have sputtered ahead of the monthly-high (1.1409) as it fails to extend the series of higher highs & lows from earlier this week. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

EUR/USD Daily Chart

Image of eurusd daily chart

Keep in mind, the broader outlook for EUR/USD remains mired as both price and the Relative Strength Index (RSI) track the bearish trends from earlier this year, but the exchange rate may continue to consolidate over the coming days following the failed attempt to close below 1.1190 (38.2% retracement) to 1.1220 (7.86% retracement).

Need a break/close above 1.1340 (38.2% expansion) to favor a larger rebound, with the next area of interest coming in around 1.1390 (61.8% retracement) to 1.1400 (50% expansion). However, failure to hold above the Fibonacci overlap around 1.1270 (50% expansion) to 1.1290 (61.8% expansion) may spur a run towards the yearly-low (1.1176), but need a close below the 1.1190 (38.2% retracement) to 1.1220 (7.86% retracement) region to open up the next downside hurdle around 1.1140 (78.6% expansion).

For more in-depth analysis, check out the 1Q 2019 Forecast for the Euro

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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Jeremy Wagner, CEWA-M , Head Forex Trading Instructor

Jeremy Wagner, CEWA-M
My Picks:  Bullish NZD/USD
Expertise:  Elliott wave, technical analysis
Average Time Frame of Trades:  few days to few weeks

NZD/USD Elliott Wave talking points:

  • NZDUSD finalized an Elliott wave triangle pattern March 7
  • Kiwi may be advancing in ‘C’ wave of zigzag pattern
  • Target of .7090 and .7298 while holding above .6744

NZDUSD Elliott wave triangle finalized

The Elliott wave pattern for NZD/USD implies a bullish bias while prices hold above the March 7 low of .6744. There is enough evidence to consider the three-month long Elliott wave triangle pattern complete. This is a bullish triangle with initial wave projections of .7090 and .7298.

NZDUSD elliott wave price chart forecasting a bullish trend.

What is the current Elliott wave for NZDUSD?

We have been keeping a decent pulse on the NZDUSD pattern since November as that particular impulse wave appeared unfinished. In early January, the partial set back was nearing an end setting the stage for a rally. The smaller Elliott wave patterns in January made it troublesome for near term bulls and the sideways grind led to a triangle pattern taking shape.

Triangle patterns appear in only certain places of the Elliott wave sequence. Therefore, if this analysis holds, then the triangle is in the ‘B’ position of a bullish A-B-C zigzag pattern. We know from our Elliott wave studies that wave ‘C’ of a zigzag must subdivide in five waves taking the shape as an impulse wave or diagonal pattern.

The March 12 high appears to be the first of these five waves. The current setback is best counted as the second wave. Therefore, the current Elliott wave appears to be wave ii of C.

As wave ‘i’ appears to have an extended fifth wave in it, a retracement back to near .6800 would be normal.

nzdusd intraday chart with elliott wave labels.

NZDUSD bottom line

So long as NZDUSD holds above .6744, the Elliott wave pattern is bullish in anticipation of a multi-hundred pip move. Wave relationships appear near .7090 and .7298 with potentially higher levels available.

A drop below .6744 suggests the triangle is still in progress and would need more time to develop. The elongated triangle remains in play if NZDUSD prices drop below .6744 but holding above .6577.

---Written by Jeremy Wagner, CEWA-M

Jeremy Wagner is a Certified Elliott Wave Analyst with a Master’s designation. These articles are designed to illustrate Elliott Wave applied to the current market environment. See Jeremy’s bio page for recent Elliott Wave articles to see Elliott Wave Theory in action.

How can I learn more about Elliott wave?

We have a beginners and advanced Elliott wave trading guides. Print off those guides and study the patterns. The two most comment patterns are impulse waves and zigzags. By understanding their structure and common Fibonacci relationships, you’ll have a great start to learning Elliott wave.

After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.

Not sure if Elliott wave is right for you? Believe it or not, when I first started trading I couldn’t understand why technical analysis worked. Now, I’m 100% technical through Elliott wave. Learn more about how Jeremy got started into Elliott wave from this podcast interview with DailyFX’s Global Markets Decoded.

Discuss this market with Jeremy in Monday’s US Opening Bell webinar.

Follow on twitter @JWagnerFXTrader .

Recent Elliott Wave analysis you might be interested in…

WTI Crude Oil Reaches a Decision Point on Price Chart

Gold and Silver Trade on their Heels

USD/ZAR Has Biggest Monthly Gain Since August – More to Come?

8 scenarios after an Elliott wave impulse pattern completes

USD/JPY Technical Analysis: 3 Year Pattern Complete?

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Dimitri Zabelin , Junior Currency Analyst

Dimitri Zabelin
My Picks:  Bearish AUD/JPY
Expertise:  Global Political Economy
Average Time Frame of Trades:  1-3 Months

AUD/JPY TECHNICAL ANALYSIS: BEARISH

  • AUD/JPY stubbornly trading between 77.735-79.852
  • The pair have attempted to breach upper bound twice
  • If attempt to break is futile, could signal bearish bias

See our free guide to learn how to use economic news in your trading strategy!

Since late-December, AUD/JPY has been persistently trading between the upper and lower bound of the 77.735-79.852 range. The pair attempted to break past resistance twice in February and appears to be endeavoring for a third. If AUD/JPY fail again, it may suggest traders are feeling are feeling overwhelmingly bearish and do not believe prevailing economic conditions can support a consistent rise above 79.852.

AUD/JPY – Daily Chart

Chart Showing AUD/JPY

The breakdown in hope for upward movement in the pair may drag AUD/JPY down to the lower bound with eyes at the next possible support at 75.243. Along the way, there may be inter-support levels which would act as soft-floors and possibly slow the descent.

Zooming out, a weekly chart shows how the Australian Dollar continuously fell against the Japanese Yen before forming a congestive track in January. The rapid selloff was likely the result of fundamental-driven fears over slower Chinese growth and the trade wars. But as the outlook began to look more mixed – though now more tilted toward the downside – traders may have halted their selloffs as a response to the ambiguity.

Chart Showing AUD/JPY

A break above or below the 77.735-79.852 range would possibly indicate traders are feeling more bullish or bearish on the pair’s trajectory, respectively. Watching how it interacts with these psychological floors and ceilings is therefore crucial to gaining insight on what traders believe the overarching direction is for the pair.

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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Peter Hanks , Junior Analyst

Peter Hanks
My Picks:  NZDUSD Weakness
Expertise:  Fundamental and Technical
Average Time Frame of Trades:  1-3 Weeks

NZDUSD Trade Setup Talking Points:

  • NZDUSD tiptoes above its 100- and 200-day moving averages, and may look to test longer-term support
  • The week ahead presents ample opportunities to spark risk aversion
  • A break below support from October and the moving averages would likely spur a deeper sell-off

NZDUSD Appears Vulnerable Near Critical Support

NZDUSD looks threatened this week as the pair treads water above support stretching back to October 2018. The trendline has held its ground since its inception and during the USDJPY flash crash. Still, the pair appears weak given the long-term downward trend from April 2018 to the topside. With the pair seemingly caught between a tale of two trends, broader-market risk aversion may see topside resistance win out.

NZDUSD Price Chart: Daily Time Frame (February 2018 – March 2019) (Chart 1)

NZDUSD price chart

Given the high levels of event risk in the week ahead, a return to the risk-averse mood experienced last week is well within reason. Should risk aversion reappear, the typically risk-on NZD may find itself pressured versus its USD counterpart which is oft regarded as a safe haven currency. Together, the technical and fundamental landscape appear skewed to the downside.

Price Levels to Watch

With that in mind, a breakthrough of the resistance trendline from April would effectively invalidate this trade setup as it is largely predicated on the strength of the longer-term trend. That said, minor resistance lies between the spot price at the time of this article’s publication and the April trendline at 0.6850. The area has provided moderate resistance in the past and marks May 2018’s swing low.

Improve your trading with “Traits of Successful Traders – Number One Mistake Traders Make.”

To the downside, the most notable level is the October trendline. A break below this level would likely open up further selling to the 0.6590 area which marked the bottom of the USDJPY flash crash. Apart from the October trendline, support is present nearby with the 100- and 200-day moving averages. A brief break below these indicators last week suggest downside pressure has been mounting. A close below either of the indicators, or both, would constitute further bearish bias.

As the pair approaches the confluence of the two longer-term trendlines, NZDUSD will likely await a fundamental spark. A Brexit breakdown or US equity weakness could deliver one. In the meantime, follow me on Twitter @PeterHanksFX for commentary and updates on this trade.

Read more: USD/CAD Risks Larger Pullback as Post-BoC Rally Stalls, RSI Flops

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX forecasts on a variety of currencies such as the US Dollar or the Yen are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

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James Stanley , Currency Strategist

James Stanley
My Picks:  USDJPY, EURJPY, AUDUSD, USDCNH
Expertise:  price action, macro
Average Time Frame of Trades:  few days - few weeks

FX Setups for the Week of March 11: USDJPY, EURJPY, AUDUSD and USDCNH

Forex Talking Points:

- DailyFX Quarterly Forecasts are available directly from the following link: DailyFX Trading Guides, Q1 Forecasts.

- For trading ideas, please check out our Trading Guides. And if you’re looking for something more interactive in nature, please check out our DailyFX Live webinars.

- If you’d like more color around any of the setups below, join in our live DailyFX webinars each week, set for Tuesday and Thursday at 1PM Eastern Time. You can sign up for each of those sessions from the below link:

Tuesday: Tuesday, 1PM ET

Thursday: Thursday 1PM ET

Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator.

The first full week of March has proven to be a notable outing across global markets for a number of reasons: The ECB announced a fresh round of LTRTO’s yesterday morning, helping to kickstart a bearish run in the Euro; and after two months of clean-running bullish trends, US stocks started to pullback for an apparent variety of reasons. The US Dollar also saw some interesting events, as prices broke-out to re-test the 21-month high but, at this point, buyers have been unable to push through.

Next week brings a few items of note, with the Brexit vote in the UK as likely one of the key events on the docket. The Bank of Japan hosts a rate decision on Thursday afternoon (Friday morning in Tokyo), and high-impact US data is set to be released on Monday, Tuesday, Wednesday and Friday. This comes on the heels of a very disappointing NFP report that saw 20k jobs added in the month of February versus the expectation of +180k.

Given the moves that have shown this week, carrying weekend risk could be especially problematic here. As such, the four setups looked at below are designed for next week’s price action, looking to avoid weekend gaps through stops that may eliminate the attractiveness of the setup before it ever has a chance to get started.

US Dollar Runs into Resistance at the 21-Month-High

US Dollar usd daily price chart

Bullish USDJPY on Hold Above 110.30

USDJPY has done a fairly good job of mirroring the risk trade so far this year, with an incredibly clean topside trend in January and February matching the risk-on themes in US stocks over the same period. But – before that clean running bullish trend could develop, USDJPY started the year with a spark of Yen-strength that had many on the edges of their seats. Risk aversion roared in Q4, and upon the open of the New Year, a surge of strength developed in the Japanese Yen that made it look as though the Q4 risk sell-off might continue into 2019.

Global markets stepped back from the proverbial ledge in January, and this helped USDJPY to recover. As the page turned into February, I began looking for bullish breakouts in the pair as prices interacted with a set of Fibonacci levels at 108.47, 109.67 and 110.86, which are the 38.2, 50 and 61.8% retracements of the November 2017 – March 2018 major move. That bullish trend lasted all the way into this week, at which point sellers reacted to resistance around the 112.00 handle to elicit a pullback all the way back down to the 110.86 Fibonacci level.

That level has since held as support; and if buyers can continue to support the move, this can keep the door open for bullish strategies targeting the 76.4% retracement of the same Fibonacci study at 112.34, which was last showing as swing support in November and December of this year.

USDJPY Eight-Hour Price Chart

usdjpy usd/jpy eight hour price chart

Bearish EURJPY on Hold Below 125.95

On the other side of the Yen, risk aversion themes priced-in very visibly against the Euro this week. The bearish side of EURJPY was my ‘Top Idea for 2019,’ and this market similarly plunged in the opening days of the New Year to test below the 119.00 handle, albeit temporarily. The next two months saw recovery take-hold as the pair built into a bear flag formation; and last Friday saw prices jump up to test resistance at prior support of 127.50.

Since then, however, bears have very much made their mark, and this caught an assist from the ECB announcement earlier this week. Prices in EURJPY plunged below the key level at 125.00, showing a short-side break below the bullish channel that made up the bear flag, and this can open the door for further downside in the pair.

From a strategy basis – this could also offer the trader an opportunity for a synthetic play on the short side of EURUSD. EURUSD may be constrained at long-term support considering the resistance that’s holding in the US Dollar; so, for traders looking at bullish exposure in USDJPY along with bearish exposure in EURJPY, the net outlay would be synthetic EURUSD short, using prevailing forces in the Yen to assist with each side of the pair (risk-on helping with the long side of USDJPY or risk-off helping with the short side of EURJPY).

EURJPY Eight-Hour Price Chart

eurjpy eur/jpy eight hour price chart

Bullish AUDUSD on Hold Above .7000

AUDUSD tested a big level this week when the .7000-handle came into play, which helped to set the low on Friday morning, just ahead of the USD sell-off on the heels of Non-Farm Payrolls.

On a longer-term basis, the .7000 level is an area that’s been staunchly defended by bulls; with only a handful of occurrences in which prices tested-below, each time with buyers soon pushing spot prices back-above. This can make for an interesting backdrop for USD-weakness strategies, particularly for traders that want to look at a bigger-picture reversal in the US Dollar following this week’s failed resistance test.

In AUDUSD, targets could be sought around prior areas of support/resistance such as .7075, .7125-.7150 and then the big zone that runs from .7185-.7206.

AUDUSD Four-Hour Price Chart

audusd aud/usd four hour price chart

Bearish USDCNH on Hold Below 6.7600

Those that regularly read this piece probably already know that I don’t spend much time trying to call tops or bottoms. But I made an exception in November of last year when looking at USDCNH inching towards the pair’s all-time-high while the US Dollar was incredibly strong (this was around the time the first failed test at 97.71 showed-up in DXY).

Since then, USDCNH has unraveled-lower and that trend has remained fairly-clean so far throughout 2019 trade. The past week has seen a bit of pullback in that trend, and the door may be soon opening to continuation approaches. If prices can stay below the Fibonacci level at 6.7581, the door can remain open for bearish trend strategies. Targeted objectives could be sought at 6.7000, followed by a re-test of the nine-month-low at 6.6750 and then the 6.6161 Fibonacci level.

USDCNH Daily Price Chart

usdcnh usd/cnh daily price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a plethora of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

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

Contact and follow James on Twitter: @JStanleyFX

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Dimitri Zabelin , Junior Currency Analyst

Dimitri Zabelin
My Picks:  Bullish USD/NOK
Expertise:  Global Political Economy
Average Time Frame of Trades:  3-6 Months

USD/NOK TRADING STRATEGY: BULLISH

  • USD/NOK reached key resistance range: 8.7881-8.8244
  • Dominant uptrend to continue – small pullback ahead?
  • March 7 boost likely caused by pessimistic ECB outlook

See our free guide to learn how to use economic news in your trading strategy!

USD/NOK recently entered into a key resistance range between 8.78810-8.8244, opening the door for possible upward gains not seen since the end of 2015. The over-one percent boost on March 7 appears to be the result of the ECB’s gloomy outlook for growth and inflation for 2019-2020.

USD/NOK – Daily Chart

Chart Showing USD/NOK

After skyrocketing into the new range, the pair may cool down and retreat from what appears to be an outsized gain. Negative RSI divergence is signaling the pair may have a brief pullback as upside momentum gradually cools. If the lower bound of the 8.7810-8.8244 range is tested and holds with a daily close above, it could signal a strong bullish bias in the pair.

USD/NOK – 30-Minute Chart

Chart Shwoing USDNOK

USD/NOK may find additional resolve if Norway’s GDP release tomorrow falls short of the 0.3 percent forecast. The four-hour chart shows the pair just on the edge of the lower bound of resistance. Having a daily close above this point would break a significant psychological barrier that kept the pair at bay in December and early January.

USD/NOK – Four-Hour Chart

Chart Showing USDNOK

USD/NOK – Daily Chart

Chart shwoing USD/NOK

USD/NOK TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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David Song , Currency Analyst

David Song
My Picks:  Bearish EUR/USD
Expertise:  Fundamental and Technical
Average Time Frame of Trades:  2 - 10 Days

EUR/USD tumbles to fresh yearly lows as the European Central Bank (ECB) plans to implement another round of Targeted Long-Term Refinance Operations (TLTRO), and the exchange rate may continue to search for support over the coming days as clears the 2018-low (1.1216).

The announcement suggests the ECB will continue to utilize its non-standard measures to counter the risks surrounding the euro-area as the central bank sticks to the zero-interest rate policy (ZIRP), with the Euro at risk of facing a more bearish fate over the coming months as ‘the Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner.

Image of european central bank forecast for growth and inflation

In fact, President Mario Draghi & Co. may adopt a more dovish tone over the coming months as the ECB reduces its growth and inflation forecast for the policy horizon, and it remains to be seen if the Governing Council will restore the asset-purchase program as ‘the risks surrounding the euro area growth outlook are still tilted to the downside.’ As a result, the ECB’s dovish forward-guidance for monetary policy is likely to keep EUR/USD under pressure ahead of the next Federal Reserve interest rate decision on March 20, with recent price action bringing the downside hurdles on the radar as the exchange rate searches for support. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

EUR/USD Daily Chart

Image of eurusd daily chart

Failure to hold above the 2018-low (1.1216) raises the risk for a further decline in EUR/USD, but need a break/close below the Fibonacci overlap around 1.1190 (38.2% retracement) to 1.1220 (7.86% retracement) to open up the next downside region of interest around 1.1140 (78.6% expansion).

Will also keep a close eye on the Relative Strength Index (RSI) as it approaches oversold territory, with a break below 30 raising the risk for a further depreciation in the exchange rate as the bearish momentum gathers pace.

For more in-depth analysis, check out the 1Q 2019 Forecast for the Euro.

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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Jeremy Wagner, CEWA-M , Head Forex Trading Instructor

Jeremy Wagner, CEWA-M
My Picks:  Bullish USDZAR
Expertise:  Elliott Wave, Technical Analysis
Average Time Frame of Trades:  a couple days to couple weeks

USD/ZAR price action talking points:

  • Since January 31, USDZAR has been advancing in impulsive waves while correcting in three waves
  • The pattern appears incomplete to the upside
  • Target of 14.85 while holding above 13.80

USDZAR Elliott wave pattern appears incomplete for bulls

USDZAR has increased aggressively from the January 31 low. We can count this move as a bullish impulse wave with an extended fifth wave. After an impulse wave completes with an extended fifth wave, many times the correction walks back into the price territory for wave ii of (v). In the case of USD/ZAR, that price territory is from 13.70-13.85. After forming a bottom at 13.80 on February 25, USDZAR has resumed with another bullish impulse wave.

Now that the pattern of impulse advances followed by corrective declines is established we will maintain a bullish bias so long as USDZAR remains above 13.7985.

The RSI divergence coming into the recent high tips the hand that this smaller impulse wave is nearing an end. Therefore, it would be considered normal for USDZAR to correct back towards 14.00-14.10. If such a correct takes place, we will look for bullish symptoms to emerge.

usdzar price chart with elliott wave labels forecasting a further uptrend.

USDZAR Medium Term Targets

If this analysis is correct and if USD/ZAR continues its push higher, a couple of resistance levels include 14.45 and 14.85. These levels are derived by calculating the distance of the January 31 to February 14 wave with the Fibonacci extension tool and projecting a .618 or equal wave measurement from the February 25 low. We know from our Elliott wave studies that alternating waves tend to have Fibonacci or equal wave proportions.

USDZAR bottom line

USDZAR may dip to the lower 14’s to correct the recent advance. A bullish bias is maintained while holding above 13.80 with a bullish hot spot on a dip to 14.10 or a breakout above recent highs.

---Written by Jeremy Wagner, CEWA-M

Jeremy Wagner is a Certified Elliott Wave Analyst with a Master’s designation. These articles are designed to illustrate Elliott Wave applied to the current market environment. See Jeremy’s bio page for recent Elliott Wave articles to see Elliott Wave Theory in action.

How can I learn more about Elliott wave?

We have a beginners and advanced Elliott wave trading guides. Print off those guides and study the patterns. The two most comment patterns are impulse waves and zigzags. By understanding their structure and common Fibonacci relationships, you’ll have a great start to learning Elliott wave.

After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.

Not sure if Elliott wave is right for you? Believe it or not, when I first started trading I couldn’t understand why technical analysis worked. Now, I’m 100% technical through Elliott wave. Learn more about how Jeremy got started into Elliott wave from this podcast interview with DailyFX’s Global Markets Decoded.

Discuss this market with Jeremy in Monday’s US Opening Bell webinar.

Follow on twitter @JWagnerFXTrader .

Recent Elliott Wave analysis you might be interested in…

WTI Crude Oil Reaches a Decision Point on Price Chart

Gold and Silver Trade on their Heels

NZDUSD Elliott Wave Analysis: Triangle Takes Over

8 scenarios after an Elliott wave impulse pattern completes

USD/JPY Technical Analysis: 3 Year Pattern Complete?

Read More  

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