If you’d like to learn more about this trade and many others, check out my personal trading blog! USDCHF pulls back to a 61.8% Fibonacci level, a 50 SMA, and a horizontal resistance level established in December 2013 — all while in the midst of a clear downtrend. As such, I’m seeing this as a great swing trading opportunity and am going short. My only concern is that we don’t have candlestick confirmation, though in my opinion if I wait for that on the daily chart I might be waiting a bit too long. There is a reasonably long wick candle on the hourly chart at this time, which is some evidence. Overall, though, I’m basing my decisions based on the other factors.

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This week, the US Dollar fell sharply against JPY and CHF primarily lead by the minutes from the Federal Reserve’s March 18-19 meeting, which changed market expectation of the first interest rate hike even if the US unemployment rate dropped below 6.5% threshold.

The US Dollar is now headed for its first weekly loss against JPY and CHF in last four weeks. Given the backdrop, here is a technical update on USDJPY and USDCHF currency pairs.

For Technical Update on EURUSD, GBPUSD and NZDUSD, READ: Important Major Currency Pairs – Technical Update

USDJPY

  • After a decisive drop below 100-day SMA support near 103.00 mark, the pair dropped sharply below 102.00 level confirming a break below a short-term ascending trend-channel formation on daily chart. From current levels the pair seems more likely to continue its depreciating move towards a very strong support near 101.00-100.80 zone, comprising of 200-day SMA and an ascending trend-line support extending from Feb. 2013 through June, Oct. and Nov. 2013 lows. Moreover, a decisive break below 101.00 support region, marking a break below the ascending trend-line support, could infuse additional near-term weakness for the pair initially towards 100.00 psychological mark, also coinciding with 61.8% retracement level, and further towards 99.30 horizontal support.
  • However, should the pair manage to rebound and move back above 102.00 area, previous intermediate support now turned immediate resistance, the pair could possibly continue the pull-back towards an important pivot near 103.00 mark. This 103.00 region may now possibly cap any near-term up-move for the pair. However, should the pair continue with its rebound and move back above 100-day SMA, important pivot near 103.00 mark, it could possibly continue strengthening towards an intermediate horizontal resistance near 104.00-20 zone.

USDCHF

  • Following a test of the 100-day SMA resistance, this week the pair fell sharply, giving up all of its gains registered in the previous three weeks, and moved back below 0.8800 mark. The pair currently is hovering around a very important support near 0.8780-60 zone. Should the pair fail to hold this important support, it is likely to witness accelerated weakness initially towards testing over two-year low touched in March 2014 and further towards testing Sept. 2011 lows of 0.8660-50 zone, also coinciding with the lower trend-line support of a descending trend-channel formation on daily chart.
  • Alternatively, should the pair now witness some rebound, it is likely to face immediate resistance near 0.8800 horizontal zone. This is closely followed by another horizontal resistance near 0.8860-0.8850 horizontal zone. However, the pair is likely to confront major resistance near 100-day SMA region, 0.8900-0.8920 zone. Should the pair now strengthen above 100-day SMA, it could possibly break past another strong resistance near 0.9050 level, comprising of 200-day SMA, also marking a break above the upper trend-line resistance of a descending trend-channel, which could further trigger sharp up-move for the pair in the near-term.

 

Haresh Menghani
Senior Market Analyst
Admiral Markets
 
At any use of the analytical material taken from the site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», reference to the company site is obligatory.

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EUR/USD broke above Friday’s range, which was set during the release of the US NFP. After a directionless Friday session, the Monday session shows bullish decision. The market is bullish in the short-term towards the 1.38 handle ahead of Wednesday’s FOMC meeting minutes. Note that the high from last week is at 1.3820. If the market pushes above that, it will also likely break a falling channel resistance, and give a bullish signal. GBP/USD came off Friday’s consolidation price action…

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The key event risk today was ECB’s monetary policy statement and the press conference that followed. While the bank announced so change to its policy, it did mention that it had more discussion of QE, and it did expect a prolonged period of low inflation. This basically keeps the hope alive that the ECB will still reduce rates or apply some other method of loosening policy. The market traded down the euro. We saw the EUR/USD crack this week’s low…

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Learn more about this trade on my personal trading blog. EUR and CHF tend to be very highly correlated — (although I do have a long EURCHF position on at the moment, so I’m expecting EUR to outpace CHF). As such, I’m seeing bullishness on both EUR and CHF — and thus put on two orders: one to go long EURNZD and another to go short USDCHF. Below is the EURNZD setup: EURNZD And here is the USDCHF setup: USDCHF

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Learn to trade by following my own personal trading blog. In my daily chart review, I identified two setups I thought were really compelling and worth taking. First is a short position in USDCHF. This is another order that I might not get filled on — a theme for me this week — but I like the technical setup and so I’ll place the order nonetheless. Below is an EURNZD chart. I’ll be shorting this pair, targeting the green line on the chart. I was a little concerned that it was just in a range, as evidenced by the box on the chart, however I ultimately found the evidence for a bear move — namely price being at resistance and below the 50 SMA — to be sufficient justification for a short order here.

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Finding support: After putting in a low of 1.3440 to start the week, the market came down to 1.3450 on Tuesday and bounced up again. The support area seen in the EUR/USD daily chart is respected ahead of Thursday’s and Friday’s key releases from both sides. Looking at the 1H chart, it looks like EUR/USD just completed a double bottom and suggests some near-term upside risk ahead of Thursday. f there is a bullish correction against last week’s sharp decline, monitor the 1.3590 (38.2% retracement)…

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Breakout, bottom?: The USD/CHF broke above 0.8965, and thereby completed a somewhat of a rounded bottom as seen in the 1H chart. It has since tested 0.90, and the previous consolidation support area, and treated that as resistance, retreating now back to the previous resistance of the “rounded bottom” around 0.8965. This is also the 200-hour SMA ,and a projected rising speedline. As far as momentum, the 1H RSI can reflect bullish trend momentum developing if the reading can hold above 40…

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