Forex Trading Software

Posts Tagged ‘Caution’

It was inevitable. At the very least a pause in the dollar’s swan dive was likely under the auspices of a cooled advance in risk appetite trends. We saw the standard bearers for investor sentiment (equity indexes) stall and backtrack a little yesterday while the greenback extended its decline. Today, equities are back in the green; but there is a clear lack of conviction. This will help defer an immediate assault on the dollar; but it will not alleviate the pressure. That being said, there looks to very attractive setups in playing a potentail bullish reversal for the single currency – especially with EURUSD, GBPUSD and USDCHF. However, it is important to approach these early technical setups and await some kind of confirmation before simply jumping in. This is particularly sound advice considering we have heavy event risk over the coming few days, including but not limited to: NFPs, the BoE and ECB rate decisions.

For potential setups, the three aforementioned majors top my list. From a technical perspective, EURUSD will look far better when it crosses 1.30, GBPUSD after clearing 1.58 and USDCHF on a drive above 1.0650. However, it is just as critical to seek fundamental confirmation of such a development as it is to justify the technical side.

Other interesting setups that are garnering my attention are in some of the often overlooked crosses. A missed opportunity for the moment, GBPCHF surged through 1.6575 this morning and didnt’ slow down. A retracement and confirmation of new support at this level may encourage me to get long; but that will take some time. AUDCAD once again tested the 0.9350 level and failed. I’m waiting to see if we can get a channel reversal here. In place of the AUDUSD setup I was looking at yesterday, EURAUD is on the verge of slipping below a well-worn pivot level at 1.4350. A drop below this figure could open the door to 1.40. Another euro cross to take note of is EURCAD. A recent congestion pattern has developed at the top of a loose range. A break of the 20-day SMA could instigate a tumble; but fundamental support is essentail for momentum.

As for my active trades, my USDJPY long is still in place; but I didn’t get to the even 85 figure just yet to build this up to a half size position. This is not yet a true reversal. New to the mix is a short CHFJPY trade. Finally breaking three weeks of congestion, this pair has slipped below 82 (my entry) and is looking to retrace the June/July ascending trend channel and reinstate the larger bear trend.

View full post on DailyFX – Analyst Picks – Today’s Picks