The US$ has continued to lift defining recent trade into more of a classic ‘risk off’ pattern. As noted in yesterday’s post the better, lower risk/higher reward trading is still coming from the US and even European sessions. The FX indices, whilst still divergent for now, look like they could tip towards alignment for LONG US$ but, despite this, the two recent TC signals have done well. Technical trading has certainly triumphed over recent sessions though! There has been a breakout trade on the GBP/JPY overnight that delivered over 200 pips, a great pullback move on the EUR/JPY for 150 pips that was stalked from last week and, even better news, more potential breakout trades look to be brewing as well.
USDX weekly: still range bound for now. The FX indices could tip into alignment for LONG US$ so I’ll be keeping an eye out for that.
TC Signals: the two signals are positive for a combined 160 pips:
E/U 4hr: for all my concern the signal went on to deliver up to 120 pips. Major trend line support is below so look for reaction there. There is a lot of high impact EUR data, including a speech from ECB Draghi, later tonight so watch for any reaction there:
Kiwi 4hr: the TC signal is up a little, giving up to 40 pips, BUT I am still looking for support or reaction at the 0.625 level. A break and hold below there could open the flood gates though:
Other FX: Watch for reaction to the Chinese Manufacturing PMI data, EUR Manufacturing PMI data from France and Germany and the ECB Draghi speech.
E/U 30 min: this chart supports the case for better trading off shorter time frame charts during the US session. Something I note that is often more pronounced during periods of FX Index Divergence.
EUR/JPY: I noted in my w/e analysis that the E/J might be setting up as one of the best technical trades post FOMC and it delivered much already. I suggested watching for a test of 134 that would offer 150 pips and that was achieved in the last session. Watch, now, for any break or support of the triangle trend line to offer the next potential big move here:
E/J daily: watch the bottom trend line for reaction:
E/J 4hr: got the 150 pip move as suggested! Note support from the 78.6% fib. Watch the bottom triangle trend line for any reaction here:
E/J 30 min: this is another EUR based pair that has delivered low risk/high reward trading during the US session, as per my FX Index Divergence observations:
GBP/JPY: I had suggested watching the this pair for any triangle breakout and this came in spades overnight. This was how the chart appeared in my last post:
G/J 4hr yesterday:
G/J 4hr this is how the chart appears today! This trade has given up to 240 pips! The 184 level was an obvious target for any breakdown move as this is a major S/R level. Watch for further reaction at this 184 key level:
G/J 30 min: note the clean low risk/high reward trade here once the trend line gave way:
A/U daily: this is weaker but holding up better than some US$ based pairs. Watch for reaction to today’s Chinese Manufacturing data though, even though this data is only a small sample size. BTW: anyone else seeing a bit of a bullish ‘inverse H&S’ here?:
USD/JPY 4hr: something has to give here soon too. Price action seems moderated by a stronger US$ but weaker stock market.
GBP/AUD 4hr: still consolidating but watch for any TL breakout out:
GBP/NZD 4hr: ditto here:
Loonie 4hr: ditto here too:
EUR/AUD 4hr: ditto here too!