A solid day yesterday with a number of the Forex Pairs we were looking at reacting as expected. The forex market was a bit choppy over the US numbers but quickly settled back into a tight range. A poor Retail Sales number balanced by a solid Philly Fed number kept traders on the sidelines.
Dean's Daily FX Update – 16 September 2016
The EURUSD is trading in a very compressed range. We touched our zone of resistance at 1.1280 which we put in place at the beginning of the week and traded straight back down. It would have been a tough trade to take given the speed at which it happened but validates the work we did over the weekend.
The GBPUSD got down to our level of support at 1.3150. Each time we have got down there we have seen a bounce. A large bullish engulfing candle could have signaled a nice long position. Dean is a little wary of this pair so probably going to sit on the sidelines for the time being.
In the Aussie (AUDUSD) we noted that there was some divergence forming yesterday. This is one of Dean’s favourite indicators that a reversal of the trend may be about to take place. Previous support at 0.7440, stochastics turning, MACD crossing over and the EMA’s turning up would have given a signal to consider long positions at around 0.7473.
Almost identical action in the NZDUSD as was seen in the Aussie. Dean was not involved in this pair as he saw better opportunities elsewhere but nonetheless very valid opportunities to take long positions yesterday afternoon.
The USDCAD was where Dean got involved yesterday. We spoke about the resistance at 1.3234 and the divergence forming the forex pair. For those that did take the short position, you should be 100+ pips in the money. Price has stalled a bit but the long term MA’s are starting to turn and we could see a continuation of the fall. A trailing stop may be advisable.
The Yen (USDJPY) and the Rand (USDZAR) seem to be in the middle of nowhere and so sitting out of these two for the time being. Data is light today so Dean will just be managing his USDCAD position. Next week is the US Federal Rate decision so we may see limited opportunities until that one is out the way.
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