Hello Forex Traders,
FOMC dominated last week’s price action, and it is having a similar effect on price this week.
If you look at the chart below of the EURUSD, you will be able to observe that last week was nothing more than price waiting for FOMC to happen, the reaction to FOMC, and then quietness. And that sideways chop has only continued yesterday and during Tuesday’s London open session.
the TRADE SETUPS on MAJORs
One question is begging to be answered: when will the break outs occur? And how deep will the retracements be? The trade ideas on those currencies are best represented via this 4 min video. You will see the trend lines which I am monitoring for a break out trade. Those trades did not materialize during the Tuesday London session, but the trade setups are still valid anytime the rest of this week up to and including Thursday.
As I wrote in yesterday’s article which analyzes the majors, if the break outs do not occur quickly then the chances of a reversal are looming as well. However, that is still early speculation and there is still plenty of support on the EURUSD, GBPUSD, AUDUSD, NZDUSD for upside continuation to materialize.
The Golden commodity received a lift during FOMC just like all risk on sectors and instruments, but it too has not seen any follow through. Here too the question remains intact: is it a start of a trend up or just a pop up for more downside?
I am keeping a keen eye on the daily top or bottom at 1374 and 1291. A break above would indicate space up to 1500-1550. A break below would indicate a chance to move lower to 1235 and 1210.
The Dollar is in a tough spot, so let us take a look at some cross currency pairs which could have interesting setups. Maybe the Euro would have better setups?
The EURNZD has moved down a lot in the last couple of weeks, but nothing lasts forever…. The Euro in fact could be at an interesting bouncing spot. Not only against the NZD but also versus the GBP.
Basically, the EURNZD could be making a dead cat bounce to the upside. Or in other words, a relief rally upwards up to for example the 786 Fibonacci is a scenario which can play out.
The down trend lines have been broken (green and blue) and so has the last resistance. Any move down now has a decent chance of turning a retracement for more upside continuation.
The EURJPY is slowly moving upwards. The pace is certainly not that of a race driver. In fact, probably a snail is faster! But as long as the EURJPY remains in the uptrend channel (purple and green), there is plenty of reason to be buyer and no reason to be a seller (unless attempting to trade a reversal).
The EURJPY broke the major top (red) and is now retracing down lower. The chances of a bounce at the bottom of the steeper channel (green) are high and a continuation would see the EJ move up towards the -0.272 target at 137.80.
Thanks again for reading and sharing this article!!!
Wish you Good Trading and hope to see you in our trading room today!
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