Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
The EURUSD broke a significant support level last week.
I wrote about this on Friday.
You can see how the area between 1.1030 and 1.1060 had supported the single currency since August 1.
With the EURUSD now below this area on a daily and weekly closing basis, I would expect sellers to defend the region as new resistance.
As I mentioned on Friday, a retest of 1.1030/60 this week could present an opportunity to get short.
Be sure to keep an eye on the confluence of support at 1.0860/70, though.
That’s the intersection of descending channel support and a level that played a critical role between October 2016 and May 2017.
See Friday’s post to see that 1.0860/70 area in action.
I will remain bearish as long as EURUSD trades below 1.1060 on a daily closing basis with a target of 1.0860/70.
Alternatively, a close above 1.1060 would expose channel resistance near 1.1100.
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Unlike EURUSD, the GBPUSD is struggling to break free from consolidation.
The pair has been moving sideways between 1.2100 support and 1.2300 resistance since August 16.
That close above 1.2100 on the 16th played out nicely for us, but since then the price action here has been less than favorable.
However, the descending channel in the chart below could offer an opportunity over the coming days.
I’m still opposed to selling GBPUSD given how much ground the pair has lost in recent months.
But it’s going to take a daily close (using a New York close chart) above channel resistance to turn the pair higher.
I also want to see that recent low just above 1.2000 hold as support.
If it doesn’t, we could see GBPUSD carve a lower low which would target the 1.1800 region.
On the other hand, a close above channel resistance would expose 1.2380 and perhaps 1.2570.
Hopefully, a new month triggers a breakout for USDJPY.
Like many other currency pairs, the USDJPY has been consolidating for several weeks.
That 106.80 area has served as resistance since the pair closed below it on August 2.
At the other end, the confluence of support near 105.00 has attracted buyers.
Until this range breaks, I have no interest in trading USDJPY.
Given the descending nature of this pattern, I wouldn’t be surprised to see buyers extend prices above the 106.80 region.
A break above 106.80 would expose channel resistance at 108.00.
But until that break occurs, the USDJPY will remain under pressure.
EURGBP is still playing out relatively well for us.
I wrote about the topping pattern here on August 19.
The combination of a bearish engulfing week and intraday topping action caused me to think EURGBP was about to head lower.
The 0.9180 area I wrote about on the 19th held as resistance on the 20th.
Two days later the pair broke below the 0.9090 level.
However, sellers have since stalled out above that 0.9030/40 support area.
I’m still bearish while EURGBP is below 0.9090 on a daily closing basis, but I do want to see sellers take out 0.9030/40 relatively soon.
A break below 0.9030/40 would expose the late July lows at 0.8915.
AUDCAD is taking its time setting up for us.
But that’s okay. I don’t mind waiting for an opportunity.
In fact, the best trades are usually the ones that require the most time to set up.
I’m relatively neutral AUDCAD given that anything could happen down here.
Sure, the pair has been trending lower since early last year, but even the corrective moves (higher) over the years have spanned 300 to 600 pips.
This descending channel has also been in place for quite some time.
And nothing lasts forever.
I also dislike selling AUDCAD considering how the pair has already given up 700 pips since April.
It’s going to take a daily close above the confluence of resistance at 0.9070 to attract buyers and expose 0.9230.
On the flip side, a close below 0.8900 support would be a sign of continued weakness.
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