Mid-morning view of FX markets

by | September 14th, 2018, 10:56:50 | News

A quick look around the FX space

EURUSD

  • An attempt to cement a move above 1.1700 has run into a bit of trouble and we’re now just ticking under the big fig after hitting a high of 1.1721
  • Big big resistance area up here around 1.1740/50 so expect to see plenty of resistance into these highs
  • Little in the news to aid a push higher so buyers will have to keep their wallets open or the sellers will look to punish them
  • Main support comes from the late/overnight lows around 1.1685 and this will need to be cleared to pop this rally balloon, though it might need to clear the 65/70 level also

GBPUSD

  • Still keeping a bid and seems to be more intent on keeping the rally going
  • Minor resistance around 1.3150 & 1.3160/70/80 but it gets juicier into 1.3200/10/20
  • Support is key at 1.3100, then 1.3080, where we’re hearing stops are building
  • Headline risk is still high in the quid so caution still advised. Dip buying still looks choice but so is picking the dip

USDJPY

  • Was looking bullish into 112.00 earlier but Abe saying the BOJ should continue easing forever overnight helped put a top in (temp or otherwise)
  • We’re still witnessing sloth-like price action. 111.80 represented intraday support after being resistance and we’re now seeing a move back under. That might take some extra steam out of the rally but based on how it’s been moving, it might not go far. 111.60/65 was prior intraday resistance so expect support there now
  • This pair is still very much following and not leading. It’s neither risk on or risk off, USD on, USD off

AUDUSD

  • 0.7220/30 was an area of resistance through the first week of Sep and it’s not a surprise to see it there again topping move higher
  • Another slow crawler and 0.7180 then 70 are the key support lines. Get under there and a move back towards 0.7100 is likely

USDCAD

  • Looking a little lost and bereft of ideas around 1.30. One minute we have NAFTA negotiations, the next radio silence
  • That’s helping to keep it 1.2980-1.3020 with USD the main pull for lack of anything out of Canada. 1.3050 is the wider resistance to watch, as 1.2950/55 is support below
  • Like the quid, the dial is turned right up for headline risk so tread carefully

In general, we’ve seen some decent moves yesterday but context is needed. FX markets grabbed an excuse to move as the lethargy we had been seeing built up to frustration. The context is that we’re not breaking any new ground or outside of well-known ranges. If we are going to see some real break, then traders will need to do a lot more than they are now. The levels are there and are waiting to be tested. They may break, they may not, all we can do is pick our trades against them.

For me, it’s still a case of leaning on the intraday levels with smaller size and tight stops. Bank profits where I can for 10/15/20 pips, and get my stops as close to entry as soon as possible. Last week I had more failures than successes with this strategy mainly but because the trades are small no real damage was done. This week’s been better because the price has allowed me the opportunities to lock in those early profits and get stops down to BE or better.

Ryan Littlestone
Latest posts by Ryan Littlestone (see all)

Pin It on Pinterest