USD/SEK bull flag formation, targets about 6.7500. Also, breakout of strong downtrend line and bounce off 200SMA on the daily chart.
Blake Morrow
Chief Currency Strategist, Wizetrade
After a near perfect “Gartley” pattern, the AUD/CAD is now in process of completing a Head and Shoulder’s pattern which is commonly seen as a reversal pattern after a strong uptrend. Current target is about .9925
Blake Morrow
Chief Currency Strategist, Wizetrade
The USD/JPY bounced off horizontal support, the 200 day SMA and also looks to create a very long wick daily hammer. I doubt this will change the course of the USD/JPY (meaning I believe it will move lower in weeks to come) but may be good for a bounce for the next 1-2 days.
Blake Morrow
Chief Currency Strategist, Wizetrade
The USD/CAD is breaking a downtrend line, which now opens up a move to retrace back towards the 1.1000 level. This is following a false breakdown and tweezer bottom at the monthly breakout point at 1.0850.
Blake Morrow
Chief Currency Strategist, Wizetrade
The EUR/NZD daily chart may have put in a double bottom at the daily 61.8% Fib retracement level. Even though a double bottom may not be clear until we get past the 1.6275 level, if the pair hits a 3 day high above the 1.5910 level we could see a move back above 1.6000.
Blake Morrow
Chief Currency Strategist, Wizetrade
The EUR/GBP is breaking a confluence of a 61.8% retracement of the 2012 low to 2013 high, and also a weekly trend line from the last 7 years. Fundamentally, the trade makes sense as the ECB may be proactive to ease monetary policy the next month, and the BOE is expected to raise rates sometime next year.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I am short the EUR/GBP near current levels.
The E-mini futures is testing the 50 DMA currenty. Price was moving higher (upper yellow trend line) and hitting higher highs, but bigger issue for bulls currently is as price was moving higher, RSI (below) was divergent and now is breaking down.
If the futures close below the 50 day SMA, that could be a bearish event given that usually the last month we have tested and bounce back above.
Blake Morrow
Chief Currency Strategist, Wizetrade
I AM ADDING THE CHART BELOW IN RESPONSE TO THE COMMENTS FROM ANON, the smart guy.
GBP/USD has a Head and Shoulders pattern that targets the 1.6660 level, which is horizontal support and a 61.8 Fibonacci retracement. This is a bearish breakdown from multi year highs.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I have been short the GBP/USD since the ECB meeting on Thursday, May 8th.
One of last week’s EDGE Chart was the USD/CHF, which now that it is breaking higher is posting a move above the downtrend line and out of the descending wedge. This formation is bullish by design, and also has a RSI that is breaking a down trend line.
Also notice the 38% retracement on the weekly chart which we currently trade back above at the .8660 level.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer, I have been long the USD/CHF since last Thusday
One of the best technical indicators for me is when I am looking at a Japanese candlestick on a daily or weekly trend, and see a “long wick” as we near a close or an interval. The reason why this is so powerful is because that means that traders were caught a little wrong footed early on, and may have got “caught on the wrong side” and are forced to trade the other direction to cover shorts or liquidate longs. Hence a reversal takes place.
In the case of the USD, the market has definitely been bearish. No signs of letting up…until yesterday’s ECB meeting. This meeting has changed the outlook near term of the EUR and the ECB future policy actions, hence the USD index (which is comprised of about 57% of the index) may be influenced as well. Some pundits will say “the ECB has yet to act” but the market seems to care less since it seems to be caught a little “wrong footed.”
Whether or not the USD can capitalize or not on this recent squeeze or not, will be dependent on central bank activity in the coming weeks. However, 2014 has been the year of the hibernating bull for the USD. Don’t look now, but I think the bull just growled at you!
USD Index Daily chart:
USD Index Weekly
DJ FXCM USD index Weekly (for a little more balanced USD view)
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I started buying USD selectively against European currencies post ECB meeting yesterday
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