Current Positions:
- Long EURUSD from 1.3080, Stop Loss at 1.3040 (-40-pips), TP1 at 1.3160 (+120-pips), TP2 at 1.3245 (+205-pips), TP3 at 1.3325 (+285-pips)
Recently Closed Positions:
- Exited Long AUDUSD from 1.0535, Stopped at 1.0495 for -40-pips.
- Exited Long GBPUSD from 1.5322, Stopped at 1.5325 for +3-pips.
Typical Time Frame: 1-day to 1-week
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Last week I said: "The US Dollar, overall, looks on soft technical footing, considering that the major propellant behind its most recent rally (as seen in the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR)) is the USDJPY. However, the USDJPY has recently hit topside resistance above 99.50/75, the same channel that contained prices on rallies in mid-February and early-March. Accordingly, if the USDJPY is due for a pullback, it is likely this is accompanied by a compression in the 2s10s Treasury spread, which undermines the US Dollar's appeal relative to other currencies. A soft greenback for the next several days...is in the cards." The USDJPY has plunged over -200-pips from its high near 100.00, and now a test of last week's opening gap at 97.50 looks to be achieved, followed by a retest of early-March resistance (now turned to support, as per the polarity rule) at 96.60. I remain bullish, especially as Gold tumbles, and will look to buy a dip.
Elsewhere, the EURUSD remains well-bid above 1.3035/50, with a second consectutive daily Hammer forming today. The Cypriot situation is an unknown, so to say the EURUSD is going to decline on it is premature; once we know the outcomes - more funding/looting of bank accounts/default - then we can model the probabilities and trade accordingly. Just not yet.
The GBPUSD trade was exited after a retest of my entry point. I moved up the Stop last week to lock-in at least even money, and with the daily RSI uptrend off of the March 12 and April 4 lows starting to fail, it seems that the move to 1.5440 might not materialize. A move back towards 1.5135/50 could transpire if price fails at 1.5300 today. I'd rather wait to see where the moving averages line up before blindly jumping back in.
AUDUSD
Daily: (8-EMA > 21-EMA) > 200-DMA = BULLSH
4H: 8-EMA < 21-EMA = BEARISH
1H: 8-EMA < 21-EMA = BEARISH
Position: FLAT
EURUSD
Daily: (8-EMA > 21-EMA) > 200-DMA = BULLISH
4H: 8-EMA > 21-EMA = BULLISH
1H: 8-EMA < 21-EMA = BEARISH (close to flipping)
Position: Long from 1.3080, SL at 1.3040 (see above)
GBPUSD
Daily: (8-EMA > 21-EMA) < 200-DMA = NEUTRAL
4H: 8-EMA > 21-EMA = BULLISH
1H: 8-EMA < 21-EMA = BEARISH (close to flipping)
Position: FLAT, waiting on 1H crossover for a buy signal
USDJPY
Daily: (8-EMA > 21-EMA) > 200-DMA = BULLISH
4H: 8-EMA > 21-EMA = BULLISH
1H: 8-EMA < 21-EMA = BEARISH
Position: Flat, waiting on 1H crossover for a buy signal
As always, any other trade ideas and general macroeconomic musings can be found in the DailyFX Real Time News feed, or by following me on Stocktwits/Twitter @CVecchioFX.
I also host a weekly Live Trading Q&A in DailyFX Plus, on Tuesdays at 07:15 EST / 12:15 GMT, in which I delve deeper into my positions and thought processes behind my analyses.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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