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.