CURRENCYCURRENT BIASPOTENTIAL STRATEGY
EUR/USD (Short Term)
Bouncing back toward 1.2300 after yesterday's Fed-induced selloff, but all depends on ECB
GBP/USD (Short Term)
Strong resistance at monthly pivot (1.5609) may cap near-term rallies
USD/JPY (Short Term)
Retracing back toward critical 78.00 support after yesterday's rally, see full report for more details.
USD/CHF (Short Term)
Consolidating around .9800, ECB likely to have major impact
USD/CAD (Short Term)
Parity (1.00) continues to serve as a magnet, drawing prices in. See full report for more details.
AUD/USD (Short Term)
Continues to find support on shallow pullbacks, watching for buy opportunities after ECB
NZD/USD (Short Term)
Back above .8100 round handle, room for further rallies toward .8200 (pending fundamental event risk)

Matthew Weller

Technical Analyst, GFT

  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • AUD/USD
  • NZD/USD
EUR/USD (Intraday Forecast)
Potential Strategy
Bouncing back toward 1.2300 after yesterday's Fed-induced selloff, but all depends on ECB
What is the trend?Neutral
What is this pattern?Bullish Pin Candle - See all chart patterns
Why is this significant?A Bullish Pin (Pinnochio) candle, also known as a hammer or paper umbrella, is formed when prices fall within the candle before buyers step in and push prices back up to close near the open. It suggests the potential for a bullish continuation if the high of the candle is broken.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The EUR/USD fell sharply yesterday as the U.S. Federal Reserve took a relatively hawkish stance by not extending its zero interest rate pledge beyond 2014. However, the pair has since recovered on optimism about today’s ECB meeting. A bullish Pin Candle that formed during today’s early Asian session foreshadowed the recent bounce, but given the extreme uncertainty around the ECB meeting, technical traders should remain on the sideline until the event risk has passed. Stay tuned to FX360 and our daily Live Market Analysis webinars for any trade opportunities or intraday updates.

Support & Resistance Levels
Resistance 3tbd
Resistance 21.2400Round handle resistance
Resistance 11.2339Monthly Pivot
Current Price1.2271
Support 11.2200Round handle support
Support 21.2100Round handle support
Support 3tbd
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GBP/USD (Swing Forecast)
Potential Strategy
Strong resistance at monthly pivot (1.5609) may cap near-term rallies
What is the trend?Neutral
What is this pattern?Doji - See all chart patterns
Why is this significant?A Doji candle is formed when rates trade higher and lower within a given timeframe, but close in the middle of the range, near the open. Dojis suggest indecision in the market.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

Unlike the EUR/USD, the GBP/USD did not recover during today’s Asian or early European sessions. The pair sold off dramatically over yesterday’s North American session, and since has consolidated in a tight range in the lower 1.5500s. A recent doji candlestick underscores the indecision and lack of momentum in the market. This currency pair is also likely to be heavily influenced by the ECB’s decision, meaning that watchful waiting is the safest course of action until later today.

Support & Resistance Levels
Resistance 31.5800Round handle resistance
Resistance 21.5740Previous resistance
Resistance 11.5609Monthly Pivot
Current Price1.5550
Support 11.5500Round handle support
Support 21.5452Monthly S1 Pivot
Support 3tbd
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USD/JPY (Swing Forecast)
Potential Strategy
Retracing back toward critical 78.00 support after yesterday's rally, see full report for more details.
What is the trend?Neutral
What is this pattern?Bearish Marubozu Candle - See all chart patterns
Why is this significant?A Marubozu candle is formed when prices open very near to one extreme of the candle and close very near the other extreme. Marubozu candles represent strong momentum in a given direction.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The USD/JPY initially rallied as traders bought dollars in the wake of yesterday’s hawkish FOMC statement. However, the rally stalled out during today’s Asian session and has recently turned lower. As of writing, the pair is putting in a Bearish Marubozu candle on the 4hr chart, indicating strong selling pressure and foreshadowing a potential continuation to the downside. As we outlined in yesterday’s Candlestick Daily report, the 78.00 handle represents strong support for the pair and should put a floor under near-term pullbacks.

Support & Resistance Levels
Resistance 3tbd
Resistance 279.00Round handle resistance
Resistance 178.67Monthly Pivot
Current Price78.22
Support 178.00Round handle support
Support 277.25Monthly S1 pivot
Support 3tbd
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USD/CHF (Swing Forecast)
Potential Strategy
Consolidating around .9800, ECB likely to have major impact
What is the trend?Neutral
What is this pattern?Bearish Pin Candle - See all chart patterns
Why is this significant?A Bearish Pin (Pinnochio) candle, or inverted hammer, is formed when prices rally within the candle before sellers step in and push prices back down to close near the open. It suggests the potential for a bearish continuation if the low of the candle is broken.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The USD/CHF has pulled back modestly following yesterday’s Fed-induced surge. Currently, the pair sits below the .9800 round handle, which served as reliable resistance in the past and may continue to put a cap on rates moving forward. Regardless, trading the USD/CHF is pointless, until and unless the EUR/CHF starts to move substantially; instead, traders should focus opportunities in the EUR/USD, which has been moving directly opposite to the Swissie and offers lower spreads and better liquidity.

Support & Resistance Levels
Resistance 3tbd
Resistance 21.0000Key psychological resistance
Resistance 1.9800Previous resistance
Current Price.9790
Support 1.9737Monthly Pivot
Support 2.9700Round handle support
Support 3tbd
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USD/CAD (Swing Forecast)
Potential Strategy
Parity (1.00) continues to serve as a magnet, drawing prices in. See full report for more details.
What is the trend?Neutral
What is this pattern?Doji - See all chart patterns
Why is this significant?A Doji candle is formed when rates trade higher and lower within a given timeframe, but close in the middle of the range, near the open. Dojis suggest indecision in the market.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The USD/CAD again bounced from parity (1.00) yesterday, but as with past cases, the bounce was short lived. The pair has been inexorably drawn back to the key psychological level throughout this week, and another drop toward that level may be in the works this morning. Note that, even though there is not a clear geographical connection, today’s ECB meeting will likely have a significant spillover effect into this pair as well, so traders looking to fade the recent bounce may want to wait until after the ECB to be safe.

Support & Resistance Levels
Resistance 3tbd
Resistance 21.0092Monthly Pivot
Resistance 11.0050Previous resistance
Current Price1.0028
Support 11.0000Key psychological support
Support 2.9936Monthly S1 Pivot
Support 3.9900Round handle support
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AUD/USD (Swing Forecast)
Potential Strategy
Continues to find support on shallow pullbacks, watching for buy opportunities after ECB
What is the trend?Up
What is this pattern?Bullish Pin Candle - See all chart patterns
Why is this significant?A Bullish Pin (Pinnochio) candle, also known as a hammer or paper umbrella, is formed when prices fall within the candle before buyers step in and push prices back up to close near the open. It suggests the potential for a bullish continuation if the high of the candle is broken.
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The Aussie has recovered almost its entire pullback from yesterday’s multi-month highs and is back above the round 1.0500 handle. The pair carved out a large 4hr Bullish Pin / Engulfing candle last night, preceding the rally we’ve seen over the course of today’s late Asian and early European sessions. Moving forward, the pair has been well-supported on dips, and any temporary weakness will be seen as a buying opportunity as the recent uptrend shows no signs of stopping yet.

Support & Resistance Levels
Resistance 3tbd
Resistance 21.0600Round handle resistance
Resistance 11.0555Previous resistance
Current Price1.0513
Support 11.0450Previous support
Support 21.0400Round handle support
Support 31.0377Monthly Pivot support
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NZD/USD (Swing Forecast)
Potential Strategy
Back above .8100 round handle, room for further rallies toward .8200 (pending fundamental event risk)
What is the trend?Neutral
What is this pattern?No pattern present - See all chart patterns
Why is this significant?
What other indicators or Fib Levels support this thesis?
Reason for Strategy

The Kiwi’s story is similar to that of the Aussie: the pair pulled back yesterday, but the broad uptrend of the past two weeks remains intact. The pair is back above the key .8100 level once again, and on the verge of breaking yesterday’s highs. As we outlined in yesterday’s Candlestick Daily report, “The bulls have the upper hand as of writing, and a move toward the .8200 handle will be favored from a technical perspective. Stay tuned to FX360 and our daily Live Market Analysis webinars for any trade opportunities or intraday updates to take advantage.”

Support & Resistance Levels
Resistance 3tbd
Resistance 2.8217Monthly R1 pivot
Resistance 1.8200Round handle resistance
Current Price.8122
Support 1.8100Round handle support
Support 2.8012Monthly Pivot
Support 3tbd
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TRADE IDEAS

  • Trades to Watch
  • Trades in Progress
currency trade idea
USD/CAD
Medium term



 Buy Buy at 1.0230
Stop at 1.0195
Target at 1.0275
currency trade idea
GBP/JPY
Medium term
Opened 5/16/2013
 Sell Short from 156.6000
Stop at 157.4
Target at 155.1
These are hypothetical trades and should not be relied upon as a substitute for independent research.

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