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Currency Pair Overview:
Euro Supports The Dollar Index
The major currencies posted small gains against the U.S. dollar, however, the euro, which is the biggest component of the dollar index, traded flat throughout the overnight session. The dollar index is holding above the 77.00 area, and a swing point that has been pivotal in recent trade.
The macroeconomic calendar is clear of any red-flag reports on Monday, which is likely to hold back any speculative moves on the Martin Luther King U.S. holiday. The pattern of trading over the last few weeks showed that the market tends to move the most during days with a busy calendar, since it allows traders to gauge the near-term macroeconomic trends and global sentiment towards potential growth.
Dollar Index Technical View: TheLFB Member Charts
The euro (Eur/Usd 1.4380) is trading around the 20-day moving average, showing no desire to break either way. The euro had been among the weakest currencies in recent trade, and can be traced back to Greece's downgrades, and strains on the European financial system. Favor short positions, or a straddle.
TheLFB Trade Plan of the Day is one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, as well as S&P futures, oil, gold, and the dollar index.
The pound (Gbp/Usd 1.6360) is currently trading in the 1.6340 area, near the 50-day moving average, where the pound topped over the last two days of trading. A break higher that holds on a 4-hour chart above 1.6390 will be important, and until then, favor a reversal to support.
The aussie (Aud/Usd 0.9265) moved lower in the Asian session, then spent the European trading hours moving almost exclusively higher. The daily chart has a swing point that has held for almost 3 months at the 0.9330 area. Look for long tests of the 0.9400 area.
Aussie Technical View: TheLFB Member Charts
Overall View: Looking for an up-trend continuation
4 Hour Chart: Long Price Points: 0.9400-0.9450. Looking for: A Long, wave V)
Momentum: The pair's trend went Flat on 26th October, and moved sideways since then with no real strength until eventually moving Short in December. In recent trade, a Neutral trend has been established.
Elliott Wave: Aud/Usd is trading towards the 0.9400 zone, after our black, corrective wave IV) bounced from the 38.2% retracement zone of the wave III) distance that held at 0.9170.
The target of the black wave V) is around the 0.9400-0.9450 zone, where an impulse red wave V, of a larger blue wave 5, may hit its highs. After this, we will look for a move into the short side of the pair. Any short move back below 0.9170 will suggest that a top is already in place.
The cad (Usd/Cad 1.0265) had a slow overnight session, ahead of the Tuesday Bank of Canada interest rate decision. The BoC have publicly complained about C$ strength. Investors expect this to be repeated on Tuesday, and is something that may keep institutional investors out of the market. Favor a straddle.
The swissy (Usd/Chf 1.0250) had trading range of only 20 pips overnight, stuck around the 100 day SMA at 1.0270. The swissy is trading in an area packed with daily simple moving averages, including the 20 SMA at 1.0320, the 50 SMA at 1.0220, and the 100 SMA. Favor a straddle.
The yen (Usd/Jpy 90.85) is consolidating just above the 100-day moving average, an area that held the market for five days. Eur/Jpy is trading flat. Gbp/Jpy is very volatile, as long Gbp/Usd is muted by flat Usd/Jpy, and is creating Gbp/Jpy volatility.
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Disclosure: No positions