To receive James Stanley’s Analysis directly via email, please sign up here.
- This is one of the many DailyFX webinars that we host each week, most of which are completely free to all traders. If you’d like to attend this event in the future, or if you’d like to find another of our webinars that may fit your trading style even better, please check out our DailyFX Webinar calendar to find the best session for you.
- In this webinar, we used price action to look at macro markets after USD-strength started to show following last week’s FOMC rate decision. We also had a speech from Fed Chair Janet Yellen taking place at the time, and you’ll hear some running commentary around that in the early portion of this webinar.
- The first market we looked at was the U.S. Dollar. As we had written this morning, this recent move of strength appears to be corrective in nature as the longer-term bearish trend remains intact with no clear signs of abating. We looked at potential resistance around the 94.00 handle, and should prices break above this zone from 94.08-94.30, the bearish theme in USD no longer looks as attractive; and bulls can then cast targets towards 95.00 and then the big-picture Fibonacci level at 95.86.
- We then moved over to look at the Euro as one of the more interesting ways of fading this recent batch of USD-strength. EUR/USD is nearing a key zone of support that runs from 1.1685-1.1736. There’s also a trend-line around that area as we shared during the webinar, and this could further substantiate bullish plays should a deeper support test be in the cards.
- We then looked at GBP/USD, and we had published and updated technical report earlier in the day. GBP/USD is putting-in a bull-flag formation as a bearish channel has started to show near resistance. Prices have finally slid below the support area we were watching previously that had held-up for most of last week. We showed how a couple of additional levels of higher-low support could be generated, and support showing ahead of the confluent zone that runs from 1.3117-1.3187 could open the door for bullish continuation in the pair.
- We then looked at AUD/USD as a long-USD candidate. Aussie has underwent some change of recent, which appeared to start on September 21, right around a speech from RBA Governor, Phillip Lowe. Since then, the bears have been back, and while we’ve seen some USD-strength show against most major currencies, few have moved-lower as aggressively as the Australian Dollar has. This can open the door for short-side exposure, and a revisit of the zone from .7929-.7946 can open the door for lower-high resistance.
- We then looked at USD/CAD, which is continuing to work with a trend-line that had previously held the lows throughout 2013 and all the way into July of 2014. We had highlighted this trend-line as support just ahead of this month’s Bank of Canada rate decision; but as the BoC hiked, that trend-line gave way as sellers pushed prices lower. But over the past week, price action is now finding resistance on the under-side of this trend-line, giving the appearance of bearish continuation. Given that prices haven’t yet peeled lower, traders will likely want to wait until short-term price action begins to put in bearish indications, which can open the door to short-side continuation with targets cast towards prior lows around 1.2100.
- We then looked at USD/JPY, which continues to run within the longer-term zone of support/resistance that exists from 111.61-112.43. This zone contains multiple Fibonacci levels, and the top-side of this zone helped to set four days of resistance on the daily chart. We’re currently seeing support within this zone, but while this gyration has been taking place, a bull flag has begun to show. Also of interest if trading anything Yen-related – JPY can see considerable strength on further flares around the North Korean situation. Market risk aversion can spell a really strong Yen, and this is something that traders taking short-Yen exposure should keep in mind as this situation continues to develop.
--- Written by James Stanley, Strategist for DailyFX.com
To receive James Stanley’s analysis directly via email, please SIGN UP HERE
Contact and follow James on Twitter: @JStanleyFX