FX Price Action Setups Talking Points:
- The next week-and-a-half bring a busy economic calendar loaded with items of interest, key of which are Central Bank rate decisions out of Europe and the FOMC.
- FX markets are relatively quiet with the big drivers on the horizon, but a number of areas present pockets of potential opportunity. Those were looked at in this webinar.
- DailyFX Forecasts are published on a variety of markets such as Gold, 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.
The next week-and-a-half present some interesting items on the economic calendar. On Thursday, the European Central Bank hosts a rate decision with the wide-expectation for a cut. The Fed does the same on the following Wednesday, and at that meeting, we will finally get updated economic projections after the bank’s 25 basis point cut in July. In between a smattering of key risk events shows up, such as US CPI to be released on Thursday alongside the ECB presser to go along with Advance Retail Sales and U of Mich Consumer Sentiment.
In the US Dollar, the currency is holding at a key zone of resistance that runs from 98.33-98.50, which can help to keep the door open for short-side strategies.
US Dollar Four-Hour Price Chart
Chart prepared by James Stanley; US Dollar on Tradingview
On a longer-term basis, the currency remains in a rising wedge pattern, which will often be approached with the aim of bearish reversals. For this to fill-in, we’d likely need a grander dovish push from the FOMC which, at this point, doesn’t look to be in the cards for the September rate decision. October or perhaps even December could be seen as more likely for this to play through.
US Dollar Weekly Price Chart
Chart prepared by James Stanley; US Dollar on Tradingview
EUR/USD – Caught in the Middle Ahead of ECB
Is this the meeting where the European Central Bank makes another throw into the QE array? A rate cut here is widely-expected but that may not move the needle much in Euro price action. A QE announcement, however, could bring far more impact but the bigger question is whether the bank is there yet and with a leadership change set to take place later this year, it may be an inopportune time to make new announcements that will have to be executed upon by someone who hasn’t even taken office yet.
This can set the Euro up for strength potential on an ECB disappointment. From a technical perspective, there isn’t yet much to work with although setups on either side can be justified based on timeframe used for analysis, as discussed in the webinar.
EUR/USD Four-Hour Price Chart
Chart prepared by James Stanley; EURUSD on Tradingview
USD/CHF Sticks to Bullish Channel
For bullish USD-strategies I’ve been following USD/CHF over the past couple of weeks. The pair has stuck to a bullish trend-channel as prices have made a move back above the .9900 level. That scenario can continue until the price of parity comes back into play, looking for a continuation of higher-highs and higher-lows until the psychological level is traded at.
USD/CHF Four-Hour Price Chart
Chart prepared by James Stanley; USDCHF on Tradingview
Bearish USD/CAD For Short-Side USD Themes
On the other side of the Greenback, USD/CAD has filled-in the reversal theme fairly well over the past week. Current support is showing at the secondary target, taken from around the 1.3132 Fibonacci level. Selling here could be a tough prospect but – the prior support level around 1.3200 looms large for lower-high resistance potential.
USD/CAD Four-Hour Price Chart
Chart prepared by James Stanley; USDCAD on Tradingview
AUD/USD Tests Resistance After Near-Parabolic Rally
Those oversold conditions in AUD/USD sure came undone pretty quickly. As US-China relations have calmed, at least in the headlines, AUD/USD has snapped back. But price action is now testing a key zone of resistance that can leave the door open for short-side swing scenarios.
AUD/USD Four-Hour Price Chart
Chart prepared by James Stanley; AUDUSD on Tradingview
USD/JPY Breaks Out
Another interesting move has shown in USD/JPY after the pair spent most of the past month trading inside of the 107.00 handle. A BoJ comment about the possibility of even deeper negative rates, combined with calm between US and China have helped to elicit a bit of Yen-weakness with the pair pushing up to the 107.50 level. As shown in the webinar, this can keep the door open for bullish continuation scenarios but, traders may be better served matching that theme of Yen weakness up with another currency, such as the British Pound.
USD/JPY Four-Hour Price Chart
Chart prepared by James Stanley; USDJPY on Tradingview
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 Gold or 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
