GBP/USD is still on an uptrend on the 1-hour time frame but it is currently stalling around the middle of the rising channel, suggesting that bulls are having trouble sustaining momentum. Today’s UK claimant count change report could determine the direction of this pair.
Another decline in claimants would be positive for the pair, possibly boosting it to the top of the channel around the1.5900 handle. On the other hand, a weak jobs figure might trigger a selloff to the bottom of the channel or might result to a break down.
A straddle setup on the current levels (1.5750) might work for this market event and a wide stop of 100-pips should be enough to weather the additional volatility.
NZD/USD Reaction to RBNZ Statement (September 12, 2013)
RBNZ Governor Graeme Wheeler also adopted forward guidance in his latest rate decision in saying that the central bank is looking to increase interest rates by next year. According to him, the recovery in the housing sector and the rise in commodity prices could lift inflationary pressures and require a rate hike.
NZD/USD is currently trading at the top of its recent range around the .8100 major psychological level. Sustained buying momentum could eventually trigger a sharp breakout throughout the rest of the trading sessions, pushing NZD/USD to new highs.
The size of the recent range is around 350 pips so the upside break might be of the same size. Setting a 100-pip stop and going long at market would yield a good reward-to-risk ratio.
Trading the US Retail Sales Report (September 13, 2013)
NZD/USD has been trending higher on its 1-hour time frame, thanks to rate hike speculations confirmed by the recent RBNZ meeting. The pair is currently stalling close to the .8100 handle, which might be a good entry point for a long trade if the retail sales report comes in weak.
With two months’ worth of weak jobs data, consumer spending could slow down in the U.S. and fall short of expectations. If that happens, the Fed Septaper might not push through and trigger a sharp dollar selloff. NZD/USD might bounce to new highs if that happens.
On the other hand, a strong US retail sales release would confirm the Septaper for next week and provide support for the US dollar. NZD/USD could break below the .8100 mark and possibly go as low as .8000.
With that, a straddle play might be a good option for this pair if it continues to consolidate prior to the US retail sales release.
USD/JPY Resistance Turned Support (September 16, 2013)
USD/JPY is currently treading above the 98.80 area, which is right in line with a former resistance turned support zone. Stochastic is moving up from the oversold region, suggesting a potential bounce.
Take note that Japanese traders are on holiday today, which opens the possibility for higher volatility for yen pairs. Traders are awaiting news on the Fed’s Septaper for the FOMC statement on Wednesday this week so the dollar could be extra sensitive to US data.
US Empire State manufacturing index and industrial production are due today. Weaker than expected data could worsen the dollar’s ongoing selloff while strong figures could keep USD/JPY above the support zone.
GBP/USD Rising Channel Support (September 17, 2013)
GBP/USD is still on its current uptrend, based on the rising channel on the pair’s 1-hour time frame. The pair just came off a dip and bounced from the 1.5600 area to the 1.5900 mark last week and appears ready to make another test of support.
The pair is edging lower ahead of the UK CPI release today, as traders expect a dip from 2.8% to 2.7%. However, a higher than expected reading might put pound bulls back into action, as it would prompt some policymakers to call for an earlier end to easing.
A buy order at the 1.5850 minor psychological support at the bottom of the channel could be a good entry level. A stop below the 1.5800 mark should be enough to weather volatility for today’s releases while a target at 1.6000 would yield a 2:1 reward to risk ratio.
NZD/USD has been on a very strong uptrend since the start of the month, as the RBNZ’s hawkish remarks and risk appetite have been spporting the pair.
The pair looks ready to make another test of the trend line around the .8200 major psychological support level but stochastic is still pointing down, suggesting a stronger move lower.
Take note that the FOMC statement is scheduled for today and that this could cause a lot of volatility for dollar pairs. A taper decision might trigger a downside break of this trend line and signal the start of a downtrend.
Kiwi bulls could enter at a bounce at .8200 with a tight stop and a possible stop-and-reverse setup if the trend line breaks in the US session.
GBP/USD staged a strong rally yesterday, thanks to the upbeat BOE minutes and the Fed’s decision against tapering. This was enough to push GBP/USD past the upward channels on the 1-hour and 4-hour time frames.
Right now, a bullish pennant consolidation pattern is forming. Although the path of least resistance is to the upside, there’s still a couple of event risks for the UK today.
The UK will release its retail sales and CBI industrial orders expectations. A small rebound is expected but we might be in for strong figures, given how the UK economy has been performing recently.
A long order above the 1.6150 area is a good level to enter and a tight stop below the pennant would yield a good reward-to-risk if you’re aiming for the 1.6300 resistance.
USD/CAD: Trend Line and Divergence (September 20, 2013)
USD/CAD had a sharp drop followed by a quick retracement yesterday, as the FOMC statement against tapering triggered overall dollar weakness. The pair is currently finding resistance at the 61.8% Fib on the 1-hour time frame.
Stochastic has already reached the overbought region and formed a bearish divergence but it has yet to cross down. The pair could still test the trend line and former support level around the 1.0300 major psychological level before resuming its drop.
Shorting at market with a stop above 1.0300 and a target of the previous lows near 1.0200 would be a good day trade with a reward-to-risk of at least 2:1.
USD/CHF is in a solid downtrend these days, as a falling trend line can be formed when connecting the highs of the price. The pair has broken below several key support levels but might be in for a pullback today.
There are no reports due from Switzerland, as the positive sentiment from the recent SNB statement is expected to keep the franc supported. As for the US, there are a few medium-tier reports due today but might not be enough to save the Greenback from the ongoing selloff.
On the 1-hour time frame, the pair is consolidating around the .9100 major psychological level. A pullback to the trend line could reach until the .9200 handle, which is a former support area on a longer-term time frame and could act as resistance now.
Stochastic is already in the overbought region, although it could still edge higher. A short at .9200 with a stop of 50 pips and a target at .9100 would be a 2:1 trade.
AUD/USD: Break and Retest Scenario? (September 24, 2013)
AUD/USD seems to be having trouble sustaining its rallies, as a major correction might take place instead. The pair found resistance at .9500 and may pull back to an area of interest before resuming its rally.
The .9200 major psychological support is right around the 50% Fibonacci retracement level while the 38.2% level lines up with the .9300 mark. These areas could act as support if the pair does make a huge correction.
Going long at .9300 with a stop below .9200 and a target at .9500 or higher makes for a good reward-to-risk on a swing trade. Stochastic is moving down, suggesting that Aussie bulls are taking a breather for now.
