It was a slow start as the majors moved cautiously throughout the week leading up to the event that would announce whether the US Fed would begin tapering stimulus this month. The event was highly anticipated to validate expectations supporting some sort of action towards tapering. However, the outcome resulted in the US Fed announcing that tapering would be left on hold in view of the need for stronger evidence of economic growth. This surprised the markets who were expecting a different outcome and in response saw the majors against USD break topside from consolidation, surging north upon immediate weakening of the USD.
GBPUSD
Level to Watch:
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160460
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What to look for:
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BUY: 160670 (break above)
SELL: 160300(break below)
A break above 160460 will promote further bullish momentum with the first test sitting at 160473 (76%). A break above this level will then see 160663 (previous day high) as the next resistance level. Should price maintain its momentum above 160663, moving north from this level will then bring the following levels into view: 161455(WR1), 161033(DR1), 162073 (DR2) and 162710(DR3).
Alternatively, a bearish scenario will need to see a break lower through 160460 (DP) followed by a break through 160048 (23%) which is also a level that may hold as support. Breaking through the 23% level, will expose: the following targets: 159381(DS1), 158798 (DS2) and finally 157780 (DS3). |
Bullish Levels:
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T1: 161033, T2: 162073, T3: 162710
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Bearish Levels
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T1: 159381, T2: 158798, T3: 157780
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Potential Catalysts:
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CBI Trades Survey (Sept 25),Housing Prices, GDP (Q2),Gfk Consumer Confidence (Sept 26)
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EURUSD
Similar to Pound, EU remained locked in a tight consolidation leading up to the FOMC announcement. The immediate weakness in the USD following the FOMC announcement,saw EU break out topside over 140 in one candle in response to the outcome which surprised the markets. From here,price remained at the highs until the close of the NY session.
Still maintaining it bullish edge, EU has not yet faltered and this week sees EU commencing the Asia session still locked within the consolidation formed on the 19th September. However with the levels adjusted for the new week, GU is still locked in consolidation, sitting at DP. This does suggest momentary hesitation in regards to direction. So far, there has not been any signs of weakness or rejection, moving into the new week, therefore, it is very possible that what we are looking at is a continuation north with resistance waiting at the higher key levels.
Level to Watch:
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135363
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What to look for:
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BUY: 135500 (break above)
SELL: 135270 (break below)
A break above 135363 will promote bullish momentum level which will first test 135483 (previous day's high). Moving north from this level will place the following levels into view: 135980 (DR2), 136247 (DR3) and then 136642 as the next target.
Alternatively, a break through 135270 (DP) will see 135095 (23%) as the next support level. A confirmed break through the 23% level, will promote further bearish momentum and expose the following levels: 134821(DS1), 134546 (DS2) and finally 134160 (DS3).
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Bullish Levels:
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T1: 135980, T2: 136642 T3: 136642
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Bearish Levels
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T1: 134821, T2: 134546 T3: 134160
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Potential Catalysts:
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ECB President Speech, CPI - Core, IFO (Sept 24), Gfk Consumer Confidence (Sept 25), ECB Speech, Economic Sentiment Indicator, Business Climate, Consumer Confidence, Industrial Confidence, Services Sentiment, Harmonised Index of Consumer Prices, CPI (Sept 27)
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AUDUSD
Like the other majors against the USD, it was a positive start for AU, who opened over 70 pips higher than its last NY close. The week saw AU touch a bottom of 92847, while surge above 95 to a high of 95281 upon USD weakness post the FOMC announcement, closing the NY session under 94. As we begin the new week, AU lacks the exuberance to charge forward, as the Asia session starts with a sombre tone. Currently drifting higher from an open near the previous day's low (93763), AU currently sits at the 23% level, waiting patiently yet lacking the motivation to make a move. Though this week is light with data supporting the AUD, it is most likely, as has been the case previously, that AUD will take its lead from other sources in the absence of its own domestic backing. Look to movement in the USD and potential movement in the commodities market.
Level to Watch:
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94273
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What to look for:
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BUY: 94400 (break above)
SELL:94200 (break below)
A break above 94273 will instigate a bullish attempt with the first test level at 94386.If AU manages to break 94386, this may signal a potential long trade while price is able to maintain above board. Moving north from this level will then place the following targets into view: 94824(DR1) followed by 95752 (DR2) and then 96299 (DR3). Breaking higher from DR3 will bring forward 96450 as the next target.
Alternatively, a break through 94300 (DP) will then see the next support level sitting at 93955 (23%). A break through the 23% level will promote bearish momentum exposing the following levels: 93370 (DS1), 92811 (DS2) and 91865 (DS3).
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Bullish Levels:
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T1: 94824, T2: 95752 , T3: 96299
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Bearish Levels
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T1: 93370, T2: 92811, T3: 91865
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Potential Catalysts:
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RBA Annual Report (Sept 24), Financial Stability Review (Sept 25)
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USDJPY
Taking the opposite side from its counterparts, UJ commenced the week lower from its last NY close, opening at 98689. Finding support upon a dip to 98445, UJ remained fairly optimistic as it proceeded to consolidate anxiously around 99144, awaiting its fate upon the US Fed's upcoming tapering announcement. With the release of the Fed deciding to hold tapering action in favour of stronger signs of economic growth, UJ reacted dropping over 90 pips, before picking itself back up upon finding support at 97755. This then saw UJ move swiftly back above 99 finding resistance at 76% (99545), closing the NY session at 99215.
Currently, UJ is positioned at the 23% level maintaining a slightly bearish tone yet still supported withinthis top consolidation area from the bottom 97755 made on the 18th September. A break through the 23% will set a bearish tone for intra-day trading while breaking back towards the mid 99 area will see a re-rest of resistance to contain the pair from further movement north. Breaking above 99545 will see UJ move forward with higher targets in view (see levels below).
Currently, UJ is positioned at the 23% level maintaining a slightly bearish tone yet still supported withinthis top consolidation area from the bottom 97755 made on the 18th September. A break through the 23% will set a bearish tone for intra-day trading while breaking back towards the mid 99 area will see a re-rest of resistance to contain the pair from further movement north. Breaking above 99545 will see UJ move forward with higher targets in view (see levels below).
Level to Watch:
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99545 (top) and 98915 (support or bearish continuation)
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What to look for:
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BUY: 99545 (break above)
SELL: 98900 (break below)
A break above 99545 will promote bullish momentum level which will first test at 99662(previous day's high). Moving north from this level will place the following levels into view: 99940 (DR1) followed by 100687 (DR2) and then 100785(MR2). Breaking higher from MR2 will then bring 101758 (DR3) into view.
Alternatively, a break through 98915 (DP) will expose the following levels: 98106 (DS1), then 97120 (DS2) and finally 96355 (DS3). |
Bullish Levels:
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T1: 99940, T2: 100687, T3: 100785
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Bearish Levels
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T1: 98106, T2: 97120, T3: 96355
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Potential Catalysts:
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Chicago Fed Act Index (Sept 23), Housing Price Index, Consumer Confidence (Sept 24)Durable Goods Orders, New Home Sales, JPY Machine Tool Orders (Sept 25), Personal Consumption Exp, GDP, Initial Jobless Claims, Pending Home Sales, JPY National CPI (Sept 26), Personal Spending, Core Personal Consumption Exp, Personal Income, Reuters/Michigan Consumer Sentiment Index (Sept 27)
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* Please note that all trade set ups provided in this post are suggestions only and no responsibility will be taken for any loss of money in the FX markets. If you have any feedback or comments, please feel free to leave a comment or email liveforextradingmarketanalysis@gmail.com..
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