Greenback’s popularity seems to be growing daily. Over the last ten trading days, the U.S. dollar has been steadily gaining ground relative to leading counterparts. Today, the USD / JPY announced a pretty impressive day and is currently breaking through the momentum that was formed on September 2nd. See the following table:
USD / JPY Daily chart
In the last 12 days of trading, this pair has already earned more than 400 pips. What we see here is the creation of higher and lowest declines – features of an upward trend. While we can’t yet say the pair is on an uptrend, we can’t deny the strong bouncing we recently saw in the course. The moving average of 200 days is only about 360 pips away, and the main resistance level is about 107,494, which is just over 300 pips. If the pair continues to trade at a higher level and succeeds in conquering these levels, an upward trend could very well occur.
At the moment, the strong bullish move at USD / JPY is quite extended, and if you want to enter long positions on this pair, it might be wise to wait for the first appearance to recede. Hunting for such powerful moves is often an easy way to lose money. Entering price retracement trading allows you to stop harder and hit bigger targets more easily. See these examples in the four-hour chart:
EUR / USD
I like the determined sales we’ve seen on this pair in the last few days since it broke the 200-day moving average. Over the last few weeks, price movements in EUR / USD have been steep and without a clear direction. It seems that the pair may continue to trade slightly lower in the next few days, especially if we follow the current bullish momentum on the US dollar. Currently, the pair is quite pre-sold, and if you look at the great distance between the 20-EMA and the current market price, it confirms the current state of oversold sales of this pair. Under normal conditions, it is better to wait for some kind of correction to happen, even on a large time frame like a daily chart. Let’s look at the daily chart EUR / USD:
EUR / USD daily chart
The pair broke the bottom of this triangle today, and the lowest candle level for Brexit could be the next level of interest support. I think in the next day or two we could get a retracement that could offer good settings for shortening the pair. While we may not get a retracement to the 20-EMA on the daily chart any time soon, there should be more retracement on moving charts according to moving averages. This gives us a chance to find more stores, because entering 20 EMAs on the daily chart doesn’t happen all the time, but it often happens on the hourly chart. Traders can also trade with smaller stop losses in terms of pip distance. Let’s look at the hourly chart EUR / USD:
EUR / USD per hour
Here you can see how 20-EMA has been offering a lot of price resistance lately, and if you look at the two red circles on the chart, it’s clear that these entries are recorded at or slightly below 20-EMA (for traders trading certificate type strategies) , the entries are of high quality. We may soon have the same kind of opportunity to trade by withdrawing from the schedule. However, I’d rather see some sort of correction on the daily chart before I start looking for new features on smaller time frames, such as the hourly chart.
USD / CAD
The price is still supported by the 20-day exponential moving average and is still clean of the 200-day moving average. My bias towards this pair is still bullish, and I am looking to buy the sauce. Here is the daily chart of this pair:
USD / CAD po satu
Here you can see that the exponential moving averages on this chart have been re-aligned, indicating that some decent bullish momentum has returned to the market. The draw can be traded by drawing any of these exponential moving averages, depending on the shape of the candlesticks formed on the pull-in. Keep in mind that it helps a lot when the exponential moving averages are all aligned, as this gives you confirmation that you are trading in the direction of the prevailing market momentum.
Tomorrow’s economic calendar
Tomorrow is a very bright day in terms of economic data. The most important event is probably U.S. crude oil supplies at 3 p.m. This could affect the USD / CAD due to the large correlation of the Canadian dollar with crude oil prices.
