USD Charts

Hello Forex traders,

Last week’s NFP and unemployment rate figures did not encourage USD strength to continue. Although the unemployment rate fell by another tenth of a percentage, the NFP figure was again below expectations.

The net result for the EURUSD was upside. Let us take a look at the USD pairs and review the majors from a technical analysis perspective. Before we continue with charting, make sure to check out the following links:

1)      For a more interactive view of the charts, please click here to see the weekly recap video.

2)      To understand opportunity in the Forex market, check out this article on “how to find opportunity in Forex.”  

EU & GU MIX

10- 2- 2014 eu

The EURUSD remains stuck in a wedge with resistance above (magenta and red trend line and 61.8% Fibonacci retracement) and support below (light purple uptrend channel).

The GBPUSD has an almost identical situation as the EURUSD: it too is caught in between support and resistance. Price is and has been at this bounce or break spot for a while. The last few weeks of price action has seen a mixture of bullish and bearish candle sticks, of which last week was bullish for the EURUSD and wickish (on botton) for the GU.

Which side will win the clash: the trend or the weekly resistance? 

EURUSD

For the moment the weekly resistance level (fractal / brown line) is a key level. This could be the first lower high and thus a break of that level would indicate higher highs. A failure to break could mean a potential bigger reversal. Other than that only break outs would provide guidance to which side the EURUSD will most likely head to (red and green arrows).

GBPUSD

The GU has similar key levels on the chart. Price will need to break above resistance (red) or below support (various greens and purple) before a long-term direction is confirmed.

10- 2- 2014  gu

USDJPY

The Yen strength brought the USJDPY back to the 50% retracement Fibonacci level of the USDJPY daily uptrend and breakout of the triangle (purple), which is a high probability bouncing area.

Last week’s price action confirmed the importance of that level by posting a weekly bullish pinbar candle right at that 50% Fib.

Here are the most important levels to keep an eye on:

1)      For the major uptrend to continue however, price would need to break above the top (red) for a a potential dash to higher levels such as the Fib targets at 107.80 and 110.80 (Fib targets).

2)      A break below the top of the triangle (green line) would indicate the failure of price action to break through monthly resistance.

10- 2- 2014 uj

AUDUSD

The Aussie has posted 2 bullish weekly candles in a row. However, a key resistance level is close by and a break of that level without a fight is unlikely. The 0.9080 level is therefore certainly a key bull-bear line and a bounce or break spot.

A bounce at that resistance level could see the currency pair head back lower towards the -27.2% target. The strong downtrend would then see follow through.

A break of this top would not yet change the weekly down trend but would increase the probability of a larger retracement. In that case breakouts to the upside would need to target the weekly Fib levels (green).

Which currency pair do you find the most interesting for your own trading?

10- 2- 2014 au

Thank you for reading and sharing this article and wish you Good Trading!

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