USD Trend Continuation: When & Where

Hello Forex Traders,

As a new week of price action awaits us, make sure to check out the trade signals our Double Trend Trap (DTT) strategy template provided (click here).

Even more importantly, however, is the question what should we expect this week? Let us review the markets and analyze what currency pairs could have trending mode continuation trades soon.

17- 3- 2014 eu 1

EURUSD

The EURUSD made a flash crash on Thursday but has recovered ever since and the currency pair remains entrenched in an uptrend. Whether Thursday’s quick retracement (120 pips in 9 hours) will see follow through with one more retracement lower OR whether price will continues with the uptrend remains to be seen.

The key levels I am keeping an eye on are the following:

1)      Resistance trend line (magenta)

2)      Support trend line (green)

A break to the upside above resistance (magenta) increases the chances of the market taking out the Fibonacci targets. Because despite the quick downside price did stop at the 88.6% Fibonacci retracement, after it had already bounced off of the 38.2% earlier on. The -0.272 Fibonacci target at 1.40 seems the first stopping spot. The confluence of two -0.618 Fibonacci targets at 1.4040 the next.

A break to the downside below support (green) increases the chances of the market making a bigger retracement. The most likely target for the downside is the 50% Fibonacci retracement level.

GBPUSD

The GBPUSD is currently stuck in a big consolidation, or range. This has been a relatively tight one as well (for a 4 hour chart at least) as price has been oscillating up and down between 1.6570 and 1.6780.

[tweetable alt=””]Our DTT indicators are confirming the lack of GU trend on 4H & daily chart (both indicators are grey contrary to EURUSD which has green).[/tweetable]
From a discretionary point of view I would expect a trend to be back in play when price is able to punch through the resistance levels such as the trend lines (orange). If price breaks through the support level (green), then a bigger correction down to the 50% Fibonacci retracement level could be expected.

17- 3- 2014 gu 4

NZDUSD

Contrary to the GBPUSD, the Kiwi remains solidly entrenched in its uptrend. Our DTT template indicators are confirming both an uptrend on the 4 hour and daily chart. Also a classical uptrend channel (black) can be spotted on the 4 hour time frame as well.

The most recent swing high, swing low seems to be in the middle part. When a Fibonacci retracement tool is placed on that particular swing (black Fib), price has reached the -27.2% target and has retraced down from that level.

Whether the price will immediately continue or whether the pair will make a bigger correction is something that I will monitor as follows:

1)      A break below support (blue line) could see a bigger retracement first; down the 383.2% or 50% Fib (green Fib of bigger 4 hour swing) before price bounces back up towards targets.

2)      A break above resistance (red line) could see an immediate continuation towards the -61.8% target and later on to the -27.2% Fib (green).

17- 3- 2014 nu 1

Are you interested in trading one of these 3 pairs? Let us know down below!!

Thanks for sharing and wish you Good Trading!

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