The USD/SGD is still trying to break the 1.3242 level

The US Dollar versus the Singaporean Dollar has stalled at the resistance zone around the 1.3242 level. At the current stage, if there is a bounce to the downside, a double top pattern may be formed. We must keep in mind that the longer the price stays consolidated around the current levels, the higher the probability of the price breaking out instead of bouncing. If we see a breakout to the upside, then we patiently wait for the pullback to the same 3242 zone for a possible long entry. Up to now, the uptrend remains intact.

Double top on the USD/SGD?

The US Dollar versus the Singaporean Dollar is currently visiting an important resistance level around the 1.3242 area. If the price bounces to the downside from this zone, a double top pattern may formed. The double top pattern is a bearish reversal pattern and the price may try to go and test the confirmation line of the pattern which is the 1.3000 level. Besides the 1.3000 level, we also see around that area the 55 exponential moving average on the daily chart. We should wait and see if the price bounces to the downside from current levels and drops to the 1.3000 area or if it breaks the resistance at the 1.3242 level and shows a pullback for a possible long entry.

AUD/USD 4 hour chart, Descending Triangle?

Apparently, the AUD/USD has formed what it looks like a descending triangle on the 4 hour chart, due to all the consolidation that the price has had lately. During these periods of consolidation is when these chart patterns appear, many with possible trading opportunities. On the formation shown on the chart, it would be better to use the 0.8100 level as our confirmation line or breakout line. If the price breaks below this level and pulls back to it, then we could get a chance of going short, expecting a continuation to the downside of the main bearish trend.

Symmetrical triangle on the EUR/JPY 4 hour chart

The Euro versus the Yen has been much undecided today, even though during the week there was a lot of volatility, but not a clear direction or trend. That volatility has formed a symmetrical triangle on the 4 hour chart. A symmetrical triangle is a chart pattern which could break in any direction, but if the trend coming into the pattern is bearish, then there is a higher probability of seeing a breakout to the downside.

Sustainable downtrend on the EUR/USD

On the daily chart of the EUR/USD we can see that since the 55 period exponential moving average crossed below the 200 period exponential moving average, the pair has kept a very sustainable downtrend, supported by the fundamentals from each region. The 55 EMA, purple line, has acted as a very good resistance lately. The distance or separation between the 55 EMA and the 200 EMA is relatively wide and it looks like it will separate even more.

However, the rate at which the pair has been falling is getting smaller and a breakout of the 55 EMA is possible. If that is the case, then the price may try to correct all the way to the 200 EMA.

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High volatility on the Dow Jones

The Dow Jones Index has been very volatile for today, along with the major markets due to the high price fluctuations on Crude and a comeback of risk aversion. The index has found a good support around the 17000 round number level, with a good resistance at the 17433 level. The current Doji formation is an indication of indecision with high volatility due to the long shadows. If the next daily candle is bullish, then we could see an end to the current correction and the price may try to go higher and probably try to visit the next round number level of the 18000.

The GBP/JPY visits the 200 EMA on the 4 hour chart

The Pound versus the Yen continued dropping today and it broke below the 186.00 level to go visit the 200 exponential moving average on the 4 hour chart, around the 184.00 level. We can see that the drop was more than 200 pips, but when the price got to the 184.00 zone it stalled there and it is currently trying to bounce to the upside. A break below the 184.00 level could give us trading opportunities. The 186.00 level has now become its most relevant resistance.

Light Crude Oil from the US has almost reached the 57 level

The over-production in oil has kept the prices under pressure and the Light Crude Oil has broken below the 60 dollar a barrel mark to come very close to touching the 57 dollar a barrel level. The drop has been really steep and this has made some OPEC members to rethink about imposing some production cuts. However, the United States is currently keeping its production at all-time highs and demand is falling. We don’t know for sure how far down can oil go, but we do know that a lot of oil exporting countries are really feeling the pain of the dropping prices.

Looks like the GBP/USD is breaking out of the channel

On the daily chart of the Pound versus the Dollar we can see that the pair has formed a descending channel, which we have been following lately. Today we see that the price breaks above the 1.5700 level and we are now waiting for confirmation of the breakout. Once we see two or three bullish candlesticks above the 1.5700 level, then we could wait for the pullback to this same level for a possible long entry. If there is no pullback and the price continues heading higher, then we should pay attention to the 1.5827 level from where we could see a bounce to the downside. Above the 1.5827 level the pair has an open road all the way to the 200 day exponential moving average around the 1.6251 level.

Bearish Channel on the GBP/USD daily chart

The Pound has found a good resistance around the 1.5700 level versus the Dollar, but it has actually stayed consolidated between the 1.5600 and the 1.5700. On the Daily chart we can see that the price has formed a bearish channel or a “falling wedge” pattern; both are formations with bullish implications, because if the upper trend line of the channel is broken to the upside, then the price may accelerate in that direction. A change in trend or direction is possible.

100 pip bounce on the USD/JPY

The Dollar has been weakening since the beginning of today’s trading session versus the main world currencies, especially versus the Yen, due to the risk aversion that the markets have felt for today. The main stock exchanges around the world are in the red and that has hurt the Dollar, that is why we saw the USD/JPY plummet to the 118.00 level, only to bounce right back up above the 119.00 level. The pair moved 100 pips in one direction and 100 pips in the opposite direction.

The volatility that we have seen on the pair has been really amazing and now if the 4 hour candle closes like a “hammer” formation, then there is a good chance the trend will change to the upside and a visit to the 120.00 level is possible.

The USD/JPY may try to break new highs

Fundamentally speaking everything points out to more weakness on the Yen versus the Dollar. Even though today we had a down day for the USD/JPY, this could be an opportunity for new traders to come in or to add to current positions expecting the pair to continue higher. Therefore, let us pay attention to another possible visit of the 121.85 level, which is its latest high. For the moment, the 120.00 level stays as a good support zone.

Possible bullish pullback on the AUD/USD

The US Dollar remains very strong after today’s jobs data out of the United States showed that the US economy is in good track and the outlook seem rosy. The Non-Farm Payrolls number came out a lot better than expected, salaries went up, and the unemployment rate remained at 5.8%. This has put pressure on pairs like the AUD/USD, which has broken below the 0.8400 level. However, we should pay attention to a possible pullback to the 0.8400 level, which could act as resistance and hold the price there. That could present us with an opportunity to go short.

The USD/JPY is at levels not seen since 2007

The Dollar continues strengthening versus the Yen and today it has broken the 120.00 level to the upside for a moment. It then pulled back below the 120 level and it is currently stabilizing round that area. The USD/JPY had not visited the current levels since July, 2007. The different monetary policies that the United States Federal Reserve and the Bank of Japan are taking, might put more pressure on the Yen and we could see the pair break new highs. However, on the 4 hour chart we see a Doji formation with long shadows, this implies that the pair has been very volatile, but undecided. A possible long entry could be at the 119.00 level if we see a visit to that zone where a probable bounce to the upside could happen.

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The AUD/USD is at a good support area

The AUD/USD remains very weak, but it has currently reached the 200 period exponential moving average zone on the monthly chart, around the 0.8400 area. This visit to the 200 EMA on the monthly chart is very important and the pair my try to bounce to the upside or at least try to stall here. However, if the fundamentals from Australia keep showing weakness on the Australian economy and Friday’s Non-Farm Payrolls report out of the US comes out better than expected, then we could see a breakdown of this support.

Oil drops to 63.70 Dollars per barrel

The price of Light Sweet Oil for January delivery has reached a low for today of 63.70 Dollars per barrel as shown on the 4 hour chart, but it has recovered some loses at the moment. We may see a pullback to the 70.00 level, but the commodity remains very weak due to over-production. Even though some members of OPEC have asked Saudi Arabia to cut its production, the Saudis are not willing to take the pain all alone and want other members to cut their production too. That is why Saudi Arabia is not cutting its production yet and the price of crude keeps dropping.

Ascending triangle on the GBP/JPY

The Pound versus the Yen has found a good resistance on the 186.00 level, but it has not been able to break above it. However, on the 4 hour chart we can see that the price has formed an ascending triangle, which has bullish connotations. The ascending triangle formation has more probabilities of breaking to the upside, due to the fact that the lows are higher than the previous lows. This price action indicates that when the sellers try to bring the price down, they lose steam and the bulls come in and take the price back up. If we see a breakout of the 186.00 level, then we should wait for confirmation of the breakout plus the pullback before entering in a long position. It is not advisable to open a position before the price breaks out of the triangle, because it could come out in any direction.

The EUR/USD couldn’t hold above the 1.2500 level

Yesterday we saw how the EUR/USD broke above the 1.2500 level, but it then retraced rapidly to the downside, clearly the bullish momentum was not sufficient to keep the pair above that round number level. Today there has been continuation to the downside and the pair is currently trading at 1.2466. Fundamentally the Euro could remain weak versus the Dollar and that is why we could see the price testing the 1.2400 level again.

Consolidation on the USD/JPY

The USD/JPY ha reached four year highs when it came close to touching the 119.00 level, but it started retracing and it has stay consolidated around the 118.00 level. On the 4 hour chart we can see that the price has been oscillating around the 118.00 level and has formed a symmetrical triangle. The symmetrical triangle is a continuation chart pattern; therefore, it is assumed that the price has a higher probability of breaking to the upside. However, we cannot bet the house on this, because the breakout may happen in any direction. For now the 119.00 remains as its nearest resistance and the 117.00 level as its nearest support.

Bounce on the EUR/GBP from the 55 day EMA

The Euro versus the Pound reached the 55 day exponential moving average on Friday, just above the 0.7900 level. Today we have seen that the price is trying to bounce to the upside from that zone. We don’t know for sure if there is going to be a continuation to the upside and a possible visit to the 0.8000 level where we can also see the 200 day exponential moving average (blue line). Therefore, the best thing to do is to wait and see if the pair continues correcting or if it tries to break below the 0.7900 level. If there is a breakdown of the 0.7900 level, then the pair has the road open to reach the 0.7800 level.

Downtrend continuation on the EUR/USD?

On the daily chart of the EUR/USD we can see that the 55 period exponential moving average has crossed below the 200 period exponential moving average since the middle of this year. This is what they call in technical analysis a “death cross”. The moving averages cross overs are not very accurate as entry signals, but when the 55 EMA crosses above or below the 200 EMA, this could indicate a possible continuation of the trend in the direction of the cross.

On the EUR/USD we can see that since the EMAs cross, the price has kept its downtrend, even though in some occasions it has tried to correct to the upside. Today we see that the pair has come back down and if we see a breakdown of the 1.2400 level, the longer term bearish trend on the EUR/USD may continue. 

The USD/JPY reaches the 119.00 zone

The Yen keeps losing ground versus the Dollar and we can see that the USD/JPY has reached the 119.00 and it could head towards the 120.00 level if during next week the fundamentals out of the United States come out better than expected. However, at the moment the pair has retraced approximately 100 pips and it is visiting the 118.00 level. From this area the pair may try to bounce to the upside and if there are no important fundamentals that affects it, the pair may stay consolidated between the 118 and the 119 levels.

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Attention to a possible breakout on the EUR/GBP

The Euro versus the Pound has come back to its bullish trend and it has visited one more time the 0.8000 level where we can also see the 200 Day EMA. If the price breaks above the 200 Day EMA, we may get a good opportunity to go long, but first we must wait for confirmation of the breakout and the pullback to the same moving average before thinking going long. For now the zone is acting as a good resistance area.

Excellent bearish bounce on the EUR/GBP

The Euro had been gaining a lot of ground versus the Pound during last week and today we saw that the price reached the 0.8000 round number level and the 200 Exponential Moving Average (blue line) on the daily chart. These have been so far the two main reasons, plus a 76.4% Fibonacci level around the zone, that have kept the price at bay and it is currently showing a bounce to the downside from the 0.8000 area. Just below the 0.7900 we can see the 55 Day EMA (purple line) which could contribute to making the 0.7900 level a good support. Therefore, we must be attentive to a possible visit to the downside to the 0.7900 area.

Possible visit of the EUR/GBP to the 0.8000 level

The Euro continued gaining ground versus the Pound during today´s trading session and closes the week to the upside. If the bullish momentum persists, then the pair may reach the 0.8000. A little bit above the 0.8000 level we can see the 200 day exponential moving average, which may contribute to make this zone a very important resistance area. Therefore, a bounce to the downside from the 0.8000 area may be expected.

Ascending Triangle on the EUR/USD

The Euro has been consolidating versus the Dollar, but it has been making higher lows with the 55 period Exponential Moving Average on the 4 hour chart as resistance, forming what it seems like an ascending triangle. If we use the 1.2500 level as the upper line of the triangle, we can see the formation much better.

If there is a bullish breakout of the 1.2500 level, then the best thing to do is to wait for confirmation of such breakout and then the pullback for a possible long entry. However, the price may also break to the downside causing the pair to continue with its bearish long-term trend.

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A Hammer formation has been confirmed on the EUR/USD daily chart

On the daily chart of the Euro versus the Dollar we can see that the 1.2500 zone has been a very important area of support for the pair. This zone becomes even more relevant when we see that on Monday’s daily candle, a Hammer Japanese Candlestick formation has been created. When Tuesday’s candle closes in the green, the pattern has been confirmed and we could see the pair trying to go visit the 1.2600 level.

The AUD continues dropping

The Australian Dollar has been affected by the recent monetary policy of the Reserve Bank of Australia and the slowdown in manufacturing from China. Due to the fact that China is the main trading partner of Australia, when the Chinese economy slows down this is reflected on the Australian economy and on the AUD.

On the Daily chart we can see that last Wednesday the price tested the 55 exponential moving average only to bounce back down from that level. Today we see that the bearish momentum accelerates and we could possibly see a visit of the 0.8650 zone, which has been a very good support area for the pair in the past.

The GBP/JPY rallies more than 400 pips

The Pound versus the Yen has risen significantly and it has reached the 179.00 round number level after the Bank of Japan announced that it will more than triple its Japanese asset purchases along with the Government’s Pension Fund. The rise of economic stimulus in Japan has hurt the Yen and that is why we have seen the strong rally on the GBP/JPY. However, we know that the markets don’t rise in a straight line and the pair may find some resistance around this round number level. Non the less, if we do see a breakout of the 179.00 level, then the pair has a clear path all the way to the 180.70 level, which is its last month high.

The GBP/USD stays very volatile around the 1.6000 level

The Pound versus the Dollar has been very volatile during today’s session around the 1.6000 round number and psychological level, after the big drop that it suffered yesterday after the FOMC’s statement. We were expecting this level to be a strong support for the pair, but the price has tried to break it to the downside. However, The pair has not managed to stay below the 1.6000 level and it has even been above the level on occasions. From this point on there are no clear entries and the best thing to do is to wait to see how it reacts tomorrow and how it ends the week.

100 pip drop on the GBP/USD

The Dollar strengthens today after the FOMC Statement release, where the language used by the FED officials indicated that quantitative easing is over and that interest rates may go up sooner than expected. That is why we see the GBP/USD drop from the 1.6100 zone to the 1.6000 zone. On the one hour chart we can see that once the price broke down the 1.6100 level and the 200 EMA, the bearish momentum accelerated taking the pair close to the 1.6100 level. 

The EUR/USD above the 1.2700 level

The Euro versus the Dollar has continued with its bullish momentum for today and it is currently above the 1.2700 level. If tomorrow’s FOMC statement shows that the FED is in no rush to raise interest rates, then the Dollar may weaken and the EUR/USD could reach the 1.2800 level where we can see the second average target on the SmartPattern tool.

The EUR/JPY is struggling with the 137.00 level

The Euro versus the Yen is still consolidating around the 137.00 level, but it has not managed to give us confirmation of a breakout. A little bit above that round number level we can see the 200 period Exponential Moving Average on the 4 hour chart, which has also contributed in making this zone a strong resistance for the pair. However, we must be attentive to a possible breakout of the area, because the bullish momentum may accelerate if the breakout is confirmed. None the less, if the breakout is confirmed, the best thing to do is to wait for the pullback before attempting a long entry.

Bullish weekly continuation on the USD/CHF

It has been more than month since the USD/CHF broke the 200 period Exponential Moving Average on the weekly chart to the upside, around the 0.9403 level. Since the breakout, the pair has come back to the same moving average where it has found a good support during this week and it is about to close the week to the upside. We can clearly see that a breakout and pullback pattern has been completed around the 200 Week EMA and this could be an indication that during the following weeks the pair could continue going higher, especially if the FOMC statement for next week points out to a possible rate hike by the FED towards the middle or third quarter of next year.

The GBP/JPY at a key resistance on the Daily and 4 hour charts

The Pound versus the Yen has been strengthening for today and it has reached the so much anticipated resistance zone at the 173.52 level where the 55 period Exponential Moving Average on the Daily chart is, along with the 200 period Exponential Moving Average on the 4 hour chart. When the price reaches a moving average confluence area, especially between the Daily chart and the 4 hour chart, the zone becomes a very important resistance or support area. Therefore, we must be attentive to a possible bounce to the downside from this zone. If the price breaks above this resistance, then we could wait for confirmation of the breakout and then the pullback to the same area for a possible long entry.

The Shooting Star and the 200 EMA

The Shooting Star is a bearish reversal candlestick pattern which is formed by a candlestick with a small or non-existing real body and a long upper shadow. The longer the upper shadow; the higher the probabilities of seeing a change in direction to the downside. The 200 period Exponential Moving Average is very reliable as a support or resistance level, especially on the higher time frames like the Daily chart below of the EUR/USD. When a Shooting Star is formed around the 200 EMA, its implications as a bearish reversal pattern are even higher and there is a good probability that the price has found a strong resistance zone. Therefore, we should pay attention to the visits that price does to the 200 Day EMA and if a Shooting Star is formed around this moving average the chances of a bounce to the downside are really high.

The USD/JPY is at a key resistance on the 4 hour chart

The Dollar tried to rally versus the Yen for today, but it stays in a consolidation mode and it is undecided at the moment around the 107.00 level. A little bit above the 107.00 level we can see the 55 and 200 Exponential Moving Averages on the 4 hour chart, which have contributed to turn this zone into a good resistance area for the pair. It is probable to see a bounce to the downside from this zone and if this happens we could see a cross of the 55 EMA below the 200 EMA with longer term bearish implications for the pair. However, in order to see this scenario develop, the fundamentals would have to support the Yen and risk aversion should rise in the markets.

The EUR/USD tests its 200 EMA on the 4 hour chart

The EUR/USD rallies for today and breaks the 1.2800 to the upside to test the 200 Exponential Moving Average on the 4 hour chart around the 1.2815 level. On the same chart we can see that this moving average has been a good resistance zone in the past and it looks like the price is stalling at this area one more time. We can also see that the price has formed a Symmetrical Triangle, which is a chart pattern with implications of a breakout in any direction. Therefore, we must be attentive to a possible breakout of the formation, because volatility may rise on the pair. The next resistance would be the 1.2900 level and its next support would be the 1.2700 level followed by the 1.2600.

The GBP/JPY nears its 55 EMA on the 4 hour chart

The Pound has been rising versus the Yen for today and it is trying to visit its 55 period Exponential Moving Average (purple line) on the 4 hour chart, around the 172.15 level. That moving average is 15 pips above the 172.00 round number level; therefore that zone could become a good resistance for the pair. We must be attentive to a possible bounce to the downside; however, if the price breaks that zone to the upside, the pair could speed up its bullish momentum and try to reach the 200 Exponential Moving Average (blue line) on the same 4 hour chart, around the 173.81 level. The 173.81 zone has proven to be a good support area in the past and now that the 200 EMA is around that zone, this area could become resistance.

The EUR/JPY is testing its 55 EMA on the 4 hour chart

After the Euro dropped versus the Yen at the beginning of today’s trading session, the pair went back up rapidly and broke the 135.00 level to get to the 136.00 and break this level as well to touch the 55 period Exponential Moving Average (purple line) around the 136.41 level. The 55 EMA has proven to be a good resistance in the past, but a breakout of that zone could take the price all the way to the 200 EMA (blue line) around the 137.41.

If the price continues going higher and touches the 200 EMA, there is a good probability of prices stalling there and even try to bounce to the downside. Therefore, we must be attentive to the next moves on the EUR/JPY, because we may get some good opportunities to open new positions.

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The AUD/USD stalls its decline at the 0.8700 level

The Australian Dollar versus the US Dollar has made a 100 pip move after it touched the 0.8800 zone and plummeted to the 0.8700 level due to strengthening of the greenback. On the 4 hour chart we can see the drop on the pair and how it tries to bounce to the upside from the 0.8700 level. We may probably see a higher bounce from this area, but if the US Dollar continues to strengthen during the following days we could see a breakdown of the 0.8700. In such a case, we may see some opportunities to try going short on the pair below the 0.8700 level.

The AUD/USD rallies on China’s trade balance

China’s trade balance showed a rise on imports of 7% and exports of more than 15% year over year. This has caused the Australian Dollar to rally due to the fact that China is Australia’s main trading partner. On the Daily chart of the AUD/USD we can see how the 0.8700 area has been a good support for the pair, even though it has tried to break it to the downside recently. But the China news and weakness on the US Dollar has caused the pair to rally for today and it has come close to the 0.8800 level. A visit to the 0.8800 level could cause the AUD/USD to stall there and maybe try to bounce back down, but a breakout of that level could have the pair testing the next round number level of 0.8900.

Global growth slowdown is propelling the Dollar

The Dollar has been strengthening during the last couple of days after it tried to correct its latest bullish run. The economic slowdown in Europe, China, and Japan has helped the Dollar strengthen, mainly because of the different monetary policies that the United States is implementing versus the rest of the developed economies. The probability that the FED raises its interest rates by the middle of next year is still in place; however, it is possible that the current strength in the US Dollar will keep inflation in check in the United States for the time being. None the less, the long positions on the greenback have reached levels not seen since May of last year according to the Commodity and Futures Trading Commission.

It seems like the Dollar will keep its bullish trend; therefore, it is possible to see the EUR/USD heading back down and keep its long term downtrend, especially when the Eurozone economy is starting the feel the negative effects of the sanctions impose to Russia, which are hurting the trade between the two regions.

The EUR/USD breaks its ascending triangle and it’s showing a pullback

Yesterday we identified an ascending triangle on the EUR/USD 4 hour chart, which had a very good probability of breaking out to the upside. After the release of the FOMC minutes, the Dollar weakened and we saw how the EUR/USD broke to the upside of the ascending triangle and it even went above the 1.2700 level. At the moment the pair is showing a pullback to the same 1.2700 level and this area could become a good support. It is possible to see a bounce from this zone to the upside; therefore, we must be attentive to a possible continuation of the bullish momentum of the pair from this area. 

The US Dollar loses its attractiveness

Many of us may be wondering why the Dollar has lost its bullish momentum if the fundamentals from the US have been coming out better than expected. The reality is that even though new jobs have been created in the United States and the unemployment rate has dropped, this has failed to provide higher wages for the American workers. Therefore, inflation is not a problem for the US economy at the moment and the FED is in no rush to raise its interest rates. Today’s FOMC minutes may show that the central bank is holding on raising rates until they see prices really going up. That is why most investors are preferring to stay on the sidelines and are not raising their bets on the greenback just yet.