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FX Price Action Setups in EURUSD, USDJPY and USDCNH

The US Dollar has finally found some element of support after a four-day pullback showed up following a test of a big resistance level last week at 97.71. Last Friday’s NFP report appears to have assisted with matters after a disappointing print of +20k jobs added in the month of February versus the expectation of +180k. In this webinar, markets across the US Dollar were in focus along with US equities, Gold and Oil.

Keeping the US Dollar on center-stage is next week’s FOMC rate decision, scheduled for Wednesday at 2PM ET. Before that, a Bank of Japan rate decision is on the economic calendar for tonight, and this put the Yen as a primary focal point in this webinar.

Forex Talking Points:

- If you’re looking to improve your trading approach, our Traits of Successful Traders research could help. This is based on research derived from actual results from real traders, and this is available to any trader completely free-of-charge.

- If you’re looking for a primer on the FX market, we can help. To get a ground-up explanation behind the Forex market, please click here to access our New to FX Trading Guide.

If you’d like to sign up for our webinars, we host an event on Tuesday and Thursday, each of which can be accessed from the below links:

Tuesday: Tuesday, 1PM ET

Thursday: Thursday 1PM ET

US Dollar: Short-Term Bullish Case, Longer-Term Breakout Potential

There were two areas of focus in this webinar around the US Dollar. The first and longer-term in nature is a building ascending triangle formation, which will often be approached in a bullish manner. This would be using the 97.71 resistance that turned-around last week’s advance combined with the bullish trend-line taken from higher-lows since September of last year.

US Dollar Weekly Price Chart

us dollar usd weekly price chart

Chart prepared by James Stanley

On a shorter-term basis, the door would appear to be open for continued downside after prices started a fresh streak of lower-lows and lower-highs this week. This can keep the door open for a move down towards prior support/resistance at 96.30 and then 96.03.

US Dollar Hourly Price Chart

us dollar hourly price chart usd

Chart prepared by James Stanley

EURUSD: Range Reversion or Seller Control?

Similar to the backdrop in the above US Dollar setup, the longer-term view appears to run counter to shorter-term themes here. ON a long-term basis, the item of attraction around the Euro would be on further downside after last week’s announcement of fresh stimulus. But, on a shorter-term basis, prices have been trending-higher since last week’s test of Fibonacci support at 1.1187, which is the 61.8% retracement of the 2017-2018 bullish trend.

For short-term strategies, this can keep the door open for a visit of that prior resistance area at 1.1448-1.1500, with the potential for targets at 1.1400.

EURUSD Two-Hour Price Chart

eurusd eur/usd two hour price chart

Chart prepared by James Stanley

On a longer-term basis, the big question is whether a larger bearish move might follow last week’s test below support. Given the fundamental backdrop, with Europe and the ECB getting a more dovish, the door may be opening depending on how aggressive the Fed is at next week’s FOMC rate decision. A downside break here, which could go hand-in-glove with a bullish USD break above 97.71, could open the door for a downside test of 1.1000 followed by secondary targets at 1.0814-1.0863.

EURUSD Weekly Price Chart

eurusd eur/usd weekly price chart

Chart prepared by James Stanley

EURJPY with Another Bear Flag

Last week’s ECB rate decision brought a downside break through a bear flag formation as prices pushed below the 125-handle. But, that move didn’t last for long, as prices began to pullback in a very consistent fashion, conforming to a rather tight bullish channel on the way up. This has produced another bear flag formation but, as yet, there’s no signs of bearish breaks. This puts the focus back on resistance at 127.50 and 128.52; but if prices do push below 125.95 first, that door may soon re-open.

EURJPY Two-Hour Price Chart

eurjpy eur/jpy two hour price chart

Chart prepared by James Stanley

GBPUSD: Brexit Mayhem Obscures Short-Term Potential

Brexit has made a difficult short-term backdrop in GBPUSD as wild and erratic moves have shown in both directions. The big question, and something that could be linked with the above theme in the US Dollar, is whether a deeper pullback in USD allows for a bullish backdrop in GBPUSD. The pair has been holding a series of higher-lows on the Daily chart since the beginning of this year and, thus far, resistance has been confined around the 1.3350-1.3360 area. Just above that is another area of resistance potential around 1.3500; but a bullish break through that area could produce a bullish scenario for the pair.

GBPUSD Daily Price Chart

gbpusd gbp/usd daily price chart

Chart prepared by James Stanley

USDJPY Ahead of Tonight’s BoJ

Tonight brings a Bank of Japan rate decision, and the anti-risk Yen has remained weak leading up to that meeting. Bullish USDJPY was one of my long-USD markets in this week’s FX Setups, and this theme remains of interest as the pair nears a re-test of 2019 highs. Just above that level, however, is another price of relevance at 112.34, and this could be a top-end profit target for the pair going into that rate decision.

USDJPY Four-Hour Price Chart

usdjpy usd/jpy four hour price chart

Chart prepared by James Stanley

USDCNH for Bearish USD Strategies

I looked for a top in USDCNH in November of last year. The pair has since started to roll-over after failing to touch the all-time-high that was being used as a basis for stop placement. I looked at another short-side setup in the pair coming into this week, and the first target was touched overnight at 6.7000. Prices have since bounced up to prior resistance, which keeps the door open for bearish continuation as long as price remains in the bearish channel that’s formed over the past three months.

USDCNH Daily Price Chart

usdcnh usd/cnh daily 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 Q4 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 an abundance 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