FX Setups for the Week of February 11, 2019
- DailyFX Quarterly Forecasts have been updated for Q1, and 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.
US Dollar Bulls Continue to Run
It was a big week for US Dollar bulls after the currency set a higher-low last week after the FOMC rate decision. Buyers have remained in-control for much of the time since, and already USD is making a fast approach towards the 2019 high around the 97.00-handle. A pullback that developed this week off of monthly highs was stopped short, with buyers returning to show support around the 96.47 level, which is the 23.6% Fibonacci retracement of the post-Election move in DXY.
For next week, the economic calendar brings high-impact US data on Wednesday (CPI) and Friday (Advance Retail Sales, U of Mich Consumer Sentiment). This can help to keep the Dollar’s recent bullish trend in-focus, and below I look at two setups designed for next week based around the US Dollar.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley
Bullish USDJPY on a Top-side Break Through 110.10
It’s already been a busy year for USD/JPY. The Japanese Yen came into the year with a significant surge of strength, with USD/JPY jumping all the way down below the 105.00 psychological level after trading above 111.00 just a week earlier. But calm soon prevailed and Yen-sellers returned, helping the pair to recover.
The 109.67-110.00 resistance zone looked at last month soon came back into play. This area held three separate topside advances in the month of January, and as the door opened into February, 110.00 continued to help hold the highs in the pair. As looked at in yesterday’s webinar, a range had even developed within that resistance zone, indicating the bulls are continuing to persist despite the continued defense of 110.00 from sellers.
A topside break through this zone next week, with prices pushing up to fresh two-month highs can re-open the door to bullish strategies in the pair. The past month-plus of price action has built in an ascending triangle formation on the chart; which will generally be approached in a bullish manner with the expectation for the motivation that’s brought bulls in at higher-lows to eventually take out the horizontal resistance that’s held the highs.
Next possible areas of resistance following a break to fresh highs would be 110.86 (61.8% Fibonacci retracement), 111.40 (late-December swing-highs) and 112.34 (76.4% Fibonacci retracement.
USD/JPY Four-Hour Price Chart
Chart prepared by James Stanley
Bearish USDCAD on Hold Below 1.3326
It was a busy week in USD/CAD, as the pair firmed after last Friday’s support inflection at the 1.3066 Fibonacci level. As Oil prices dropped, CAD weakened, and this propelled prices in USDCAD back-above the 1.3300 handle in this week’s trade, albeit temporarily. Canadian employment numbers on Friday morning brought a bit of strength back into the currency, but USD/CAD sellers were thwarted at the support zone looked at in yesterday’s webinar that runs from 1.3235 up to 1.3259.
Taking a step back, should resistance hold at this morning’s highs, this would open the door for a continuation of the lower-lows and lower-highs that printed in the pair throughout this year. This can keep the door open for bearish strategies with the next potential areas of support around 1.3180, 1.3132, 1.3065 and then the psychological level of 1.3000.
USDCAD Eight-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
https://www.dailyfx.com/free_guide-tg.html?ref-author=Stanley
