AUDUSD – Price has his temporary support and has been trading in a range for about 7 weeks. Recent price action has suggested that AUDUSD might be able to move up. I would but about 50%of today’s candle range (provided price close like this tonight). The confirmation would be a price close above 0.8661. My first target would be 0.8813 and second target would be 0.8888. Stops would be a close below 0.8566.
NZDUSD – Like its close counter part, the kiwi also looks like its ready to move up. The confirmation would be a price close above 0.7881. My first target would be 0.7985 and second target at 0.8065. Stops would be a close below 0.7806.
As usual shift stops to one pip above entry once first target is achieved. Recent economic news has been slight bear. However I feel that the prices have been over extended to the sell side and we should see some retracement. Manage your money well as both AUDUSD and NZDUSD move the same direction.
EURUSD looks to recover from the recent drop in price. This I believe is due to the recent good news from Euro’s leading economy Germany. Germany escaped from recession when it posted a GDP growth of 0.1% in Q3. With this result, it did not suffer 2 quarters of economic squeeze. Germany also revised its Q2 result where a -0.2% contracted was revised to -0.1%. The year on year economy grew 1.2%. 0.2% more than the expected 1%.
France also reported better than predicted growth rate of 0.3% in Q3. This data however was marred by a downward revision of Q2′s data.
These news managed to pull eurusd up. However I am still bearish on the eurusd as the overall fundamentals are still gloomy. With US registering its highest QUITS (number of workers quitting their jobs) since April 2008 which is a sign of confidence in the economy, I believe any move up in the eurusd is a temporary reprieve.
I would look at bearish price action to sell the eurusd at these mentioned levels:
Level 1 – 1.2807, Level 2 – 1.2946 and Level 3 – 1.3085
On the 12th of October 2014, I gave that the trading zones of the EURUSD at 1.2894 and 1.2500. Please refer to the chart below and click here if you want to look at the previous posting regarding to the EURUSD.
Currently price is still trading in the grey box. However movement has come back to life.
Price is currently trading near the support price of 1.2500. A close below 1.2500 should see prices test the next support at 1.2440 before the strong support of 1.1968. Recent numbers from the Euro region has not been encouraging especially from Germany which many view as the leader of Euro. German preliminary CPI dropped to -0.3% and this does not augur well for the German economy.
Do you still remember this chart? I posted it on October 8th, 2014. Click here to refresh your mind.
I gave the lowest retracement value for the USDJPY at 105.42. Priced traded to that level and found support there. Since then the USDJPY started its bullish climb and today broke above 110.07 and will definitely close above it as Japan expanded the Quantitative and Qualitative Easing today.
The next major resistance of the USDJPY is 114.27. Any retracement, use previous resistance as support.
Dollar index (USDX)
The dollar index is still trading in the box and currently price is testing the year high at 86.74.
Any close above 86.74 would see prices going higher. Strong resistance is at 90.35
The EURUSD rejected the 21sma on the daily chart signalling its intention remain in a downtrend move. However price has to first close below 1.2500 before we can see a lower EURUSD. the grey box is the zone which I suspect the EURUSD will trade within if the EURUSD finds a temporary support at 1.2500.
Like EURUSD, the USDX (Dollar Index) also rejected the 21sma on the daily time frame. The grey box area is an area which I think price will trade for the moment. For the Dollar Index to go higher, price would have to close above 86.75.
Long term view:
I am bearish on the EURUSD and bullish on the Dollar Index. If you are trading against the main trend, it would not be wise to target too big. Draghi rocked the boat which his rate decision, we clearly know that we would not see a EURUSD recovery. Germany is already feared to have entered a recession. In the US, September data were not that encouraging but since then, all the important data has improved as seen in the excellent NFP, best JOLTS since 2001 and jobless claims.
Most majors are slowly retracing to the 21sma after a prolong trend. Once prices reaches the 21sma, I would start to look for entries again to continue my trend trading which is to buy the US dollar across board. However I would be tracking on which levels the prices are rejecting. I aspect most prices to actually move beyond the 21sma. The higher it goes the better. I will update the levels of rejection once price action trades nearer to those said areas.