24-Hour FX Targets

[Dave Floyd]

FX Morning Update

AUD/USD: a nice $5 bounce in gold and a decline in the dollar has seen a modest bounce in AUD/USD - however, as we noted in this mornings 24-Hour Targets & Levels, AUD/USD remains in a sideways trading range that will likely see prices capped at .7823-30

NZD/USD: see attached chart

USD/JPY: we will look to play USD/JPY from the long-side on pull-backs towards 120.00-25

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Dave

 

[Dave Floyd]

FX Follow-up

AUD/USD: a nice $5 bounce in gold and a decline in the dollar has seen a modest bounce in AUD/USD - however, as we noted in this mornings 24-Hour Targets & Levels, AUD/USD remains in a sideways trading range that will likely see prices capped at .7823-30

NZD/USD: see attached chart

USD/JPY: we will look to play USD/JPY from the long-side on pull-backs towards 120.00-25

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Dave

Pretty decent follow through on the above posting thus far - a couple of additional notes regarding USD/JPY:

While we are bullish on USD/JPY, especially ahead of the BoJ meeting this week where we expect no rate increase will occur - it will be necessary to monitor the action in EUR/JPY as a break lower there, could alter our forecast for a higher USD/JPY.

First, it is hard to envision why the BoJ would raise rates:

- LEI was below 50 for the 4th straight month in a row - suggesting a recession forthcoming
- Machine tool orders fell below year-ago levels for the first time in 3-years
- Retail sales and household spending remain subdued
- GDP data has failed to show a strong economic recovery

If no rate hike occurs this week, we see 121.00 & 121.50 as easy targets.

Regarding EUR/JPY, a break below 155.35 would accelerate JPY buying and likely derail any rally in USD/JPY.

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Dave

 

[Dave Floyd]

Gbp/usd

GBP/USD - higher, then lower

Between EUR/USD, USD/JPY & GBP/USD, only GBP/USD has a pattern that seems pretty clear, everything else is pretty sloppy in terms of technical analysis.

Below is our forecast (chart) for GBP/USD over the next 24-48 hours.

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Dave

 

[Dave Floyd]

Dollar Index Moving Higher...

My outlook for the Dollar Index (DXC)....if it plays out, it will usher in lower levels in EUR/USD and GBP/USD

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Dave

 

[Dave Floyd]

Short-Term Reversal Levels

While for the most part I employ a swing trading approach to FX - I do make use of short-term trades on occassion, and more specifically, short-term technical levels/points to refine entries and exits for swing trades.

One tool I use is something I have called Short-Term Reversal Levels (STRL's) - they are technical levels that I calculate (not fibs or pivots) that will identify areas that have a high probability of halting & reversing price action, or at the least slowing the velocity of the trend.

Regardless, like most tools, try and use them while trading to see the benefits. The levels below are valid through 2 PM EDT (22:00 GMT) on Monday - ideally, draw them on your charts so you can be aware of them. I have also attached one of my charts of EUR/USD so you can see what they look like when drawn on.

Naturally, the STRL's do not work in isolation, they are best used in conjunction with other analysis techniques that help identifiy overbought/oversold conditions.

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Dave

 

[Dave Floyd]

DXC Follow-up

My outlook for the Dollar Index (DXC)....if it plays out, it will usher in lower levels in EUR/USD and GBP/USD

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Dave

Despite the damage done in NY trading, we are still bullish on the dollar. The chart of the Dollar Index posted here last week showed that wave 4 had been completed.

Given the level that DXC stopped at today (84.54) it is exactly the price level that would have been projected if we had drawn in a fib extension as noted in the chart, we now believe that wave 4 has been completed.

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Regards,

Dave

 

[Dave Floyd]

DXC Follow-Up

Despite the damage done in NY trading, we are still bullish on the dollar. The chart of the Dollar Index posted here last week showed that wave 4 had been completed.

Given the level that DXC stopped at today (84.54) it is exactly the price level that would have been projected if we had drawn in a fib extension as noted in the chart, we now believe that wave 4 has been completed.

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Regards,

Dave

It took a while, but the support level at 84.54 did end up holding - look for DXC to make another run at the critical 85.30-40 resistance level this week.

Dave

 

[Dave Floyd]

Short-Term Reversal Levels (STRL's)

While for the most part I employ a swing trading approach to FX - I do make use of short-term trades on occassion, and more specifically, short-term technical levels/points to refine entries and exits for swing trades.

One tool I use is something I have called Short-Term Reversal Levels (STRL's) - they are technical levels that I calculate (not fibs or pivots) that will identify areas that have a high probability of halting & reversing price action, or at the least slowing the velocity of the trend.

Regardless, like most tools, try and use them while trading to see the benefits. The levels below are valid through 2 PM PDT (22:00 GMT) on Monday - ideally, draw them on your charts so you can be aware of them. I have also attached one of my charts of EUR/USD so you can see what they look like when drawn on.

Naturally, the STRL's do not work in isolation, they are best used in conjunction with other analysis techniques that help identifiy overbought/oversold conditions.

Regards,

Dave

 

[Dave Floyd]

STRL Follow-Up

While for the most part I employ a swing trading approach to FX - I do make use of short-term trades on occassion, and more specifically, short-term technical levels/points to refine entries and exits for swing trades.

One tool I use is something I have called Short-Term Reversal Levels (STRL's) - they are technical levels that I calculate (not fibs or pivots) that will identify areas that have a high probability of halting & reversing price action, or at the least slowing the velocity of the trend.

Regardless, like most tools, try and use them while trading to see the benefits. The levels below are valid through 2 PM PDT (22:00 GMT) on Monday - ideally, draw them on your charts so you can be aware of them. I have also attached one of my charts of EUR/USD so you can see what they look like when drawn on.

Naturally, the STRL's do not work in isolation, they are best used in conjunction with other analysis techniques that help identifiy overbought/oversold conditions.

Regards,

Dave

You will note that the STRL's (see attachment in previou sposting) have done a pretty solid job of isolating turning points or consolidating moves over the last few hours.

EUR/USD - lows were put in at the 1.2910-20 STRL's
USD/CHF - high for the session thus far was the 1.2520 STRL
GBP/USD - the STRL's were somewhat effective - prices more or less lost bearish momentum coming into them, but provided no clear short-term trade
USD/JPY - the STRL's were ignored by the marketplace.

As mentioned, these are not absolute 'tools' - rather a nice complement to an already viable short-term trading strategy.

Dave

 

[Dave Floyd]

Short-Term Reversal Levels (STRL's)

The levels below are valid through 2 PM PDT (22:00 GMT) on Tuesday - ideally, draw them on your charts so you can be aware of them. They are technical levels that I calculate (not fibs or pivots) that will identify areas that have a high probability of halting & reversing price action, or at the least slowing the velocity of the trend. I will post them here each day for the next couple of weeks.

Naturally, the STRL's do not work in isolation, they are best used in conjunction with other analysis techniques that help identifiy overbought/oversold conditions.

Regards,

Dave

 

[Dave Floyd]

AUD/NZD - reverse head & shoulders

Assuming the neck-line at 1.1418 can be sustained (above) - prices are set to move higher in the days ahead.

Dave

 

[Dave Floyd]

AUD/USD - set to trade lower

AUD/USD lost a lot of its bullish tone overnight - lower levels are now the focus, especially with DXC (Dollar Index) rallying off the 84.70 support level.

Dave

 

[Dave Floyd]

Dollar Index Provides Mixed Signals

Dollar Index (DXC) is looking heavy....but EUR/CHF suggests not to worry.

See charts below.

Other observations at this hour:

I would also note with regard to longs in GBP/CHF (off the overnight lows) - CHF may prove to be the better vehicle to use for shorts in the days ahead as implied volatility (IV) in JPY has increased while CHF IV has remained stagnant.

Both JPY and CHF are still prime vehicles to fund carry trades, however, until JPY IV's settle down, traders may wish to use CHF.

Dave

 

[Dave Floyd]

EUR/CHF - watch closely

EUR/CHF has made an impressive, albeit impulsive, move off the 1.6208 bull trend-channel over the last hour. We had noted on Friday that this was a key level and thus far had held.

Assuming this move is not retraced, it should indicate that another run towards 1.6288 is in the cards and as such a subsequent move higher in the Dollar Index (DXC)

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Dave

 

[Dave Floyd]

AUD/USD resistance

AUD/USD has been very stubborn at the .7860-80 level. While prices have in fact stopped moving higher, the lack of downside follow-through is a bit frustrating. Nonetheless, we still feel that AUD/USD should track lower in the hours/days ahead.

Dave

 

[Dave Floyd]

EUR/USD - a move lower?

see chart for details.....

Dave

 

[Dave Floyd]

Early Asian Trading Commentary

The dollar (DXC) continues under pressure in early Asian trading and we would not be surprised to see DXC trade towards 83.50-65 over the next 12-hours, although it will not be a straight line lower. Naturally this will have an impact on the 'majors'.

EUR/USD - despite the move higher from Friday being a bit extended, prices may well accelarate higher on a move above the 1.3207 level. If so, look for 1.3235 as a reasonable target level.

USD/JPY - while USD/JPY will generally track the dollar index (DXC) - we see some pattern divergences between the two on an hourly basis. USD/JPY may well not accelerate too much lower even with DXC weakness. The 120.60 level (STRL) will likely provide some support but may well also be the completion of 'wave 4' of a 5 wave sequence higher which can be clearly seen on a 60 & 240-min chart. For now, let's see how the 120.60 level plays out before making any determinations.

GBP/USD - looks like 1.9660 is a very achievable target over the next 12 hours or so although prices may move sideways to down prior to that move higher. Support seen at 1.9615-20

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Dave(STRL)

 

[Dave Floyd]

AUD/USD Outlook

The video clip seen below highlights our analysis currently on AUD/USD. We are beginning to sense that a long entry is at hand.

Video Clip

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Dave

 

[Dave Floyd]

AM FX Commentary

Assuming that EUR/CHF remains a valid forecasting tool for the Dollar Index (DXC), we still see more upside in DXC.

Currently EUR/CHF is on the verge of breaking above bear trend-line resistance at 1.6040-45. If this occurs, we will likely see further upside towards 1.6070 & 1.6130 - that type of a move higher will likely force DXC higher.

Under this scenario, we would likely see a break lower in EUR/USD below the 1.3070-85 level which has held very well thus far.

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Dave

 

[Dave Floyd]

Asian FX Preview

EUR/USD - we continue to see, from a short-term perspective, a move through 1.3200 towards the 1.3228 & 1.3300 level. Based on the 60-min chart, we are in wave 3 of 5 waves up so a pull-back towards 1.3160-75 cannot be ruled out, thus completing wave 4

GBP/USD - sterling continues to de-couple from the overall direction of DXC - this makes it diffiicult for us to get too interested in trading GBP/USD currently. Based on a very basic view of the charts, 1.9255 is the more likely target than anything on the upside.

USD/JPY - a break back below the 117.22 level (bull trend-line from the 5/17/06 low) would set in motion more downward momentum and push prices towards the 116.65 level

Launch FX Research

Dave