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How to Trade Fast Moving US Dollar Pairs Next Week

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Recent moves have been wondrous. Next week’s trading may require more skill however. Well-constructed channel lines can help one enter trades in fast moving impulsive markets. Focus is on setups in AUDUSD, NZDUSD, and USDCHF.

AUDUSD

Daily

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_audusd.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

FOREX Analysis: The AUDUSD is quickly approaching its .9605 target…this is where the decline from under 1.0114 would equal the width of the 1.0624-1.0114 range. Something much more bearish is possible given this week’s break below the trendline that extends off of the 2011 and 2012 lows. .9700 is a level that could produce a bounce into .9800/60. .9700 is the 88.6% retracement, 5/23/12 low, and close of the low day for 2012 (June 1st).

FOREX Trading Strategy: Looking for a low near .9700 and rally into .9800 (Fibonacci confluence) and maybe the intersection of the broken multiyear trendline and underside of the downward sloping channel (in red). That intersection occurs on 5/23 at about .9865. Bottom line – support is .9700 (play as you see fit) and resistance is .9830/60 for those looking to align for a larger drop into .9605. Stops are above 1.0005.

NZDUSD

Weekly

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_nzdusd.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

FOREX Analysis:Wrote in the last weekly that “viewed in the context of an impulsive decline from the 2011 high, it is possible that the NZDUSD will trade below .7370 before trading above .8585.” The point here is that there is additional downside although the current level (November 2012 low and internal trendline) is one that may produce a bounce. Near term resistance is difficult to hone in on at this point so all I can do is point to a zone from .8138 to .8228 with the strongest part of that zone .8174-.8208. Of interest on the downside is .7914, .7806 and especially .7640/50. The latter level is a trendline intersection in mid-June and the 78.6% retracement.

FOREX Trading Strategy: Looking to return to short side between .8174 and .8208 with .8275 stop.

NZDUSD

240 Minute

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_nzdusd_1.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

USDCHF

Daily

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_usdchf.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

FOREX Analysis: An inverse head and shoulders pattern that began exactly 8 months ago (9/14/12) was confirmed Tuesday in the USDCHF. The target from the pattern is 1.0111. In the ‘year of the breakout’, ignore such patterns at your own risk. Wrote Wednesday that “channel resistance won today but look for support at the broken upward sloping channel line and neckline (both in blue).” The neckline served as support Thursday and price is putting corrective channel resistance to the test. A break above the channel would indicate that the rally is accelerating from that point to much higher levels…and eliminate a corrective interpretation of the advance from .9021. The blue channel is a microcosm of the black channel. Any setbacks are viewed as opportunities to buy against .9520.

FOREX Trading Strategy: Have been increasing longs on near term bullish patterns. Looking for support from .9640 to .9685 (see next chart) to buy more against .9520 for .9900 and a break above .9971 and continuation into 1.0100.

USDCHF

60 Minutes

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_usdchf_1.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

GBPUSD

Weekly

How_to_Trade_Fast_Moving_US_Dollar_Pairs_Next_Week_body_gbpusd.png, How to Trade Fast Moving US Dollar Pairs Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Are you new to FX or curious about your trading IQ?

FOREXAnalysis: To review – “When considering the break of the 4 year triangle (red line on chart is former triangle support) in February, it is possible that an incredibly important top is in place at the May 1 high.” Channel support was broken Monday and it’s been downhill since. A return to 1.5321 isn’t impossible but the downside is far greater. A measured level is 1.4055 (1.4830-(1.5606-1.4830)) and a test of 1.3500 is possible.

FOREX Trading Strategy: Big picture short, would sell more above 1.5320 is given the chance…targeting 1.4055 and 1.3500. The Daily Technicals will update shorter term opportunities.

— Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele

Subscribe to Jamie Saettele’s distribution list in order to receive actionable FX trading strategy delivered to your inbox.

Jamie is the author of Sentiment in the Forex Market.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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What’s inside:

  • EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
  • Resistance in vicinity of 11825/80 likely to keep a lid on further strength
  • Targeting the low to mid-11600s with more selling

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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