USD/JPY, GBP/USD, AUD/USD Talking Points:
- While global equities continue their upward advance, many major FX pairs are exhibiting some form of range or pullback from recent themes. USD/JPY is re-testing a big level at 110.00 while GBP/USD has pulled back to the key psychological level of 1.3000. In AUD/USD, the pair has put in a rather vigorous topside bounce from a key support zone looked at yesterday following last night’s RBA rate decision.
- The big item on the economic calendar for today is US ISM Non-Manufacturing figures set to be released at 10 AM ET. Tomorrow brings New Zealand employment figures followed by a town hall with FOMC Chair, Jerome Powell, set to take place on Wednesday night at 7 PM ET. Thursday brings rate decisions out of Mexico and the UK.
- DailyFX Forecasts have been published for Q1, 2019 on a variety of currencies such as the US Dollar or the Euro and 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.
Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator.
USD/JPY Back to 110.00 – Can Bulls Push Through?
After a rather troubling start to the year for the risk trade with a significant surge of Yen-strength showing at the 2019 open, prices in the Japanese currency have continued to pullback for the past five weeks, and there’s been an increasing frequency of resistance tests in a key zone on USD/JPY that runs from 109.66-110.00. I had looked into this area last month, and even after a 150+ pip reaction to that resistance zone in the final week of January, buyers have continued to push, and price action is right back in that key area on the chart. This points to the possibility of continued gains, highlighting the 110.86 level on the charts, which is the 61.8% Fibonacci retracement of the November, 2017 to March, 2018 major move.
USD/JPY Four-Hour Price Chart
Chart prepared by James Stanley
AUD/USD Bounces From Support Zone After RBA: Buyers Constrained by Bearish Trend-Line
I had looked into AUD/USD yesterday as the currency had started to re-test a key zone on the charts. This area runs from .7185-.7205 with each of those prices coming from longer-term Fibonacci studies. Last night’s RBA rate decision appeared helpful to the bullish theme as prices put in a 50+ pip bounce from that support zone. Since then, buyers have been pulling back a bit, and resistance remains around a trend-line projection as taken from the January and February swing-highs. A topside break through this trend-line can re-open the door for longer-term bullish strategies in the pair.
AUD/USD Two-Hour Price Chart
Chart prepared by James Stanley
GBP/USD: Cable Drops Below 1.3000 After a Very Strong Four-Week Run
Brexit remains a messy situation that could be difficult to prognosticate around, and traders in the British Pound are left with the possibility of looking at or for short-term trades off of support and resistance levels; the establishment of long-term trends with the overhang of Brexit can be a challenging projection at this point.
GBP/USD started the year with a nasty spill, quickly running down to establish a fresh 20-month low in the opening days of 2019. But since then, there has been a very noticeable change-of-pace, as buyers have re-grabbed control and continued to push even despite another leadership challenge for Theresa May’s PM seat. Over the past week, however, that bullish trend has started to pull back. Prices are now testing below the 1.3000 psychological level which had previously given a bit of resistance when the currency was surging higher last month. Will buyers show up to furnish some level of support anytime soon? Or, was last month an aberration driven by short-cover, re-opening the door for a return of the bears?
Level of relevance exist around 1.2920, as this is the 38.2% retracement of the January bullish move; and a key zone appears to exist in the area from 1.2828-1.2850. A bottom-side break below that prior support could soon re-open the door to bearish strategies in the pair.
GBP/USD 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 for Q1 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
