Longer-Term Support Sought in GBP/USD, EUR/JPY and USD/JPY
Holiday periods can be difficult in markets as liquidity often diminishes and this can lead to slower, yet more erratic price movements with an even-lower degree of respect for support and resistance than what we might normally see. But, with that being said, longer-term themes still exist, and holiday hours may allow for some rather attractive entries into bigger-picture moves. So, we have to adapt. Below are three longer-term setups that are on my radar for the next two weeks.
Long Cable if Support Shows Between 1.2090-1.2190: Sellers have been scant when price action in GBP/USD has moved below 1.2200; and we haven’t seen a test this low on the chart since the BoE’s Super Thursday in early-November. If we can see support developing above the swing-lows around 1.2090, this can open the door for longer-term bullish positions with targets set towards the 1.2500-level. To read more, please click here.
Long EUR/JPY if Support Shows Between 119.90-120.91: This trend has gotten a little ‘too hot to handle’ towards the end of the year as retracements are running more-and-more shallow. But resistance at 123.09 has been rather persistent, and I’m looking for a break of support before looking to establish fresh long positions. The support swing at 120.91 is compelling as we saw a gap through this price earlier in the month, only for this to come-back as the low on ECB-day. I believe there to be a plethora of stops around this low, and I’d like those cleared-out before looking to establish fresh longs. If support shows up in the zone of 119.90-120.85, bullish positions become attractive with targets set towards 124/125. To read more, please click here.
Long USD/JPY if Support Shows between 113.99-116.12: This is the one that I really want for next year, and I’m still holding some from my prior analyst pick with one target remaining at 120.00. We discussed the difficulty of trying to catch such an aggressive trend last month in the article, How to Work With the Trend that Barely Bends. The way to adapt to a more-aggressive trend is to become less-picky with support (uptrends) or resistance (downtrends) for additional entries. But given that we’re nearing year-end, and also given that we likely aren’t going to be seeing too many fundamental drivers before we turn the page into 2017; it’s time to be extremely picky, and I’d like to see a support break clear out some stops that are likely around that 116.00-swing before looking to get more-long in the pair.
Chart prepared by James Stanley
--- Written by James Stanley, Strategist for DailyFX.com
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