Hello Forex Traders,
Yet another year of Forex trading is close to finishing as today kicks off the last trading month of the year 2013. Today’s article will review and discuss the expected movements for the upcoming month of December.
The November trading month was especially dominated by Yen and Aussie weakness. The EURJPY and GBPYJPY saw new highs, just as the EURAUD and GBPAUD did. The AUDUSD and USDJPY had their fare share of movement as well, but less than with the Euro and Pound due to the fact that both the EURUSD and GBPUSD were moving up, albeit the Cable with more speed and thrust.
YEN WEAKNESS TO CONTINUE?
Can Forex traders expect this trend to continue? Will the Yen weaken even more in December or will we see a reversal?
A trend continuation could be likely when a comparison is made to last year: the Yen weakness accelerated from 82 to 86 in December 2012 (USDJPY). January 2013 then saw a continuation of that thrust into the 90 levels, which was part of the bigger Yen weakness trend as price moved from 76 to 103.70.
That particular uptrend on the USDJPY started to stall from June this year when that month failed to post a new high. The monthly chart has not seen new highs ever since for 5 months straight.
However, the month of November, was an impulsive candle that broke through a weekly wedge (purple). November’s strong bullish monthly candle and chart pattern break therefore increase the likelihood of a trend continuation. I would not expect more than a dip down to 101 before continuing to higher levels. A break below 101 could place the trend continuation in the fridge – at least temporarily.
I am personally keeping an eye out for a retracement back to the 101 – 101.50 zone for a potential long with a target zone at 103.50, just before the top and yearly high, and a stop loss just below that area. We will monitor this trade idea in our live trading room.
There is one particular level that needs to be broken in this month of December in order to expect Yen weakness trend continuation in the year 2014: this year’s high and top at 103.70 should break with this month’s high in order to confirm the Yen weakness continuation.
A failure to break the top at 103.70 could mean a reversal back to 90-91…
AUD WEAKNESS TO CONTINUE?
The AUDUSD weakness was prevalent the last 2 months: the month of October had a massive wick on top of its monthly candle and the previous month of November was a strong bearish monthly candle.
Obviously the bearish momentum is strong and a continuation of this year’s Aussie weakness (from 1.06 to 0.8850) could definitely be in play. In that case the targets are the 0.8350 zone which has 2 Fibonacci targets lined up. Obviously the bottom at 0.8850 is still a level to reckon with before the targets can be reached.
Any upward movement has a high likelihood of turning into a correction and becoming a retracement for more downside. November’s monthly high at +/- 0.9550 would not be a level which I expect to be broken.
In fact, on the 4 hour chart a Fibonacci and trend channel could be added. These 2 tools will most likely provide a great clue when the downtrend could continue. A 61.8% Fibonacci retracement would be a very logical level. Join our trading room for more continued analysis and setups.
How do you see the Yen and Aussie develop this month? What are your key levels? Let us know down below in the comments section!
Other setups are close to unfolding as well. Keep an eye out on this week’s articles which will continue with reviewing the AUD and Yen weakness against the Euro and Pound.
Thanks for reading and sharing this article! Wish you Good Trading in December!
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