EURUSD – Euro/dollar completes 50% retrace of last major up move
In the chart below, we can see that last week the EURUSD completed an exact 50% retrace of the move higher that started on July 10th and ended on August 20th. At this point, the near-term fate of this market is mostly dependent on what happens near 1.3210 – 1.3220 area this week; if the market reconnects above this resistance, it could easily push back up into 1.3400, however, if the market stays contained under 1.3210 there’s risk for a larger move lower. Overall, the EURUSD is looking pretty indecisive right now and our current bias is neutral, we will wait for one of the two scenarios described above to begin playing out before we consider taking any positions in this market this week.
GBPUSD – Sterling/dollar strength persists, but resistance close overhead
The GBPUSD pushed higher on Friday as the up move continued from the pin bar buy signal we discussed in our August 28th commentary. Momentum is still mostly bullish in this market, but it is approaching that key resistance zone up between 1.5700 – 1.5750 which will be important this week. If the market moves up into that key resistance zone and forms an obvious 4hr or daily chart price action sell signal we would consider a short, to trade back down toward support. However, if we don’t get any obvious sell signals from key resistance and this market remains strong, we can also watch for price action buy signals from support to rejoin the recent uptrend.
AUDUSD – Aussie/dollar moves higher from support
The AUDUSD moved significantly higher last week as it pushed up from key support down near 0.8890 – 0.8847. The market is facing resistance just overhead near 0.9230 this week, but if it can overcome that level we could see it pop higher and re-test key resistance near 0.9320. If an obvious 4 hour or daily chart price action sell signal forms at one of these resistance levels this week we would consider a short entry, however given the strength we saw last week traders should be vigilant.
USDJPY – Dollar/yen retraces back to support
The USDJPY lost significant ground on Friday, but it did recoup some of those losses in to the day’s close. There was a 4 hour pin bar that formed late in the day on Friday, indicating that we could see some upward movement this week. However, due to the significance of Friday’s down-move, more conservative traders may like to wait for an obvious daily chart signal before entering as we could still see some further downside movement this week before this market pushes higher again.
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