The last 24 hrs have seen rather choppy FX action as although ADP payroll data helped to boost the USD FOMC Minutes undermined optimism here somewhat. The Minutes observed Fed optimism about the US economy but noted concern for the broader global economy. Most FX pairs are now parked at major S/R levels whilst the markets wait, rightly or wrongly, in the hope of some clear lead from tomorrow’s NFP. Whilst mildly frustrating in the short term this price action is of some benefit for traders.
USDX: the USD has moved up to trade just under the next major S/R level of 92.50. I would expect it won’t stray too far from there until after NFP:
USDX weekly: the chart below shows the importance of both the 90 and 92.50 levels. Any break and hold above 92.50 would suggest bullish continuation and have clear consequences for pairs like the EUR/USD.
Stocks took the positives out of the Fed minutes and the uptick with Oil though to stage a rally after a 5 day losing streak BUT note how price has dipped back into the Cloud:
S&P500 daily Cloud:
VIX: the ‘fear’ indicator fell today but is still looking threatening as it trades near the top of the daily Cloud:
Forex: Many FX pairs are hovering near major S/R level and price action on some is a bit choppy. This may continue until after NFP but is not without its benefits though! This kind of action enables the ADX indicator, currently elevated on many pairs following recent big moves, to get back down towards the 20 level in readiness to signal the next major momentum move. Any new TC signal developing after a respect or break of a major trend line or S/R region would be an encouraging signal to follow. Thus, this choppiness has its benefits!
E/U: the E/U has dropped to trade just above the major 1.18 S/R level. I have been noting this as major support for many months now and price might park here now until after NFP. The TC signal is now up to 320 pips:
E/U 4hr: Note how the ADX indicator is returning towards the 20 base line level. This will enable any new TC signal to be more easily read and determined. I’ll be watching for any new TC signal forming after a break or respect of this 1.18 level:
E/U monthly: any break and hold below the 1.18 may signal the start of a 4,000 pip triangle breakout. (see w/e analysis for notes here):
E/J: this TC signal has given up to 550 pips but note how price has stalled at the support of the monthly daily 200 EMA and 61.8% fib region. This is the 61.8% fib of the major 2008-2012 bear move and is, thus, a significant fib level.
E/J 4hr: again here note the change with the ADX:
E/J daily: showing daily 200 EMA and 61.8% fib support:
A/U: this is still stuck in a band between the 0.80 and 0.82 levels. I wrote earlier about watching these levels for any breakout to support a new trade and I stand by this. Any break and close below 0.80 may support the start of a, second, new 600+ pip Bear Flag. The ADX remains elevated here for now though:
A/J: this TC signal has now closed off after giving up to 100 pips. Price is still below the 4hr and daily Cloud but 96 is acting as major support. I’m watching for any new TC signal here. One good thing about this period of consolidation is that the ADX is heading back lower:
GBP/USD: the Cable is down testing a major monthly triangle support trend line now and the TC signal has given up to 400 pips. The continued slide here has not allowed the ADX to ease yet though.
Kiwi: this is proving to be quite a resilient pair. Price remains choppy around the 61.8% fib region of the recent bear move and price also remains in a descending channel. Note how the ADX is below 20 and so any new momentum move here may be easier to track:
U/J: nearly every whole and half value is a key one for the U/J but price remains above the 118.5 level for now.
U/J 4hr: Note how the ADX on the 4hr chart is heading towards 20 and so any new momentum move will be easier to spot:
U/J monthly: this chart show the importance of the 118.5 level:
GBP/JPY: 179 is a major S/R level for this pair and price looks to be parked there now ahead of NFP.
G/J 4hr: note how price is consolidating above the 179 level and how the ADX is re-grouping:
G/J monthly: chart showing the importance of the 179 level:
Loonie: this new TC signal has faded but I had warned against this given the level of the USD:
Swissie: this TC signal has given up to 230 pips and price is holding up well. Price has broken up and out from the bullish Cup ‘n’ Handle breakout but note how the ADX is re-grouping:
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