Setups on Both Sides as USD Strength the Big Question
USD Strength the Big Question explained by professional Forex trading experts the “USD Strength the Big Question” FX trading team.
USD Strength the Big Question
The U.S. Dollar found a bounce off of support yesterday, but bulls have yet to show a full-fledged return as sellers remain below prior support. This opens the door to setups on both sides of EUR/USD, and we look at a variety of ways to position around that.
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– We started off by looking at the U.S. Dollar, which has pulled back towards the subordinated support zone that we were looking at on Tuesday. The big question now is whether bulls will be able to continue the movement above that prior area of support around 94.08-94.30, as current resistance is showing around the flat level of 94.00.
– The big point of focus for today was EUR/USD, as there are currently setups on both sides of the pair after Tuesday’s rip-roaring rally. The shorter-term setup would be looking for continued top-side in EUR/USD, utilizing the assumption that today’s selling was a pullback in the near-term bullish move that started earlier in the week. This would be looking for targets towards the 1.2000 psychological level for another re-test. The longer-term picture, however, would be more bearish in nature; looking to work with a shooting star on yesterday’s Daily candle that produced a lower-high below the prior October batch of resistance. We discussed both setups in this morning’s Market Talk entitled, EUR/USD Churn Continues as Shooting Star Shows: A Bullish and a Bearish Case.
– We then briefly went over to EUR/JPY and then returned a bit later to look at setups on both sides of this pair, as well. The bullish case would be a bit more formulaic given recent price action, driven by the assumption that the two months of support around 131.40-132.05 will continue to hold as a re-test of 134.41 comes into play. But – as we saw on the four-hour chart later in the webinar, there’s a trend-line projection that’s showing resistance, and this could open the door to a further fall before that longer-term bullish theme might be ready for resumption. We discussed these yesterday in the article entitled, EUR/JPY Technical Analysis: Support Bent, but Not Broken.
– We then looked at USD/CHF, which is a bit cleaner than EUR/USD while looking at similar types of themes. A Fibonacci retracement drawn from the October 19th low up to the October 27th high offers a series of levels that have had some bearing in recent USD/CHF price action. Support came in yesterday off the 61.8% retracement of that move, and prices appear to be in the process of moving towards the prior swing high, around the 76.4% of that same move. If we do see resistance before the prior swing-high of .9986, the door is opened for short-side setups.
USD Strength the Big Question Conclusion
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