FX traders should focus on these levels

FX traders enjoyed some very
directional swings last week
… usual market action for currencies. Not often do
we see all trend charts nearing key levels of pull back continuation or trend
reversal confirmation, but the Dollar Index and all major pairs are nearing such
action points now.

Trend View:

USD Index

Greenback index shows
88.50 ~ 88.20 is a dual support zone of fib congestion. That will be a
resolution point against the major foreign currencies if/when hit. Most
major currency pairs are near key decision points on their charts right
now as well.


Eurodollar has clustered resistance near its
2200 zone. At least two retracement levels and a number of other studies (not
shown) come together in this area. If the year-long USD rally against euro will
continue, that 2200 zone will hold its top.


The USD pulled back into key dual support
against the Yen overnight, a much anticipated move. The Dollar’s rally against
Yen since early September has been cut in half, most of that retracement on two
big surge candles lower. What took months to build only required a couple of
weeks to unwind… and the next pivotal point visible to everyone on this chart
is being tested now.

High-odds zone to seek long trade signals
within. If 113.50 fails on a weekly close, expect 110 ~ 109 to be revisited


Currency markets are all nearing key decision points on their trend
charts. The FX has been very active and highly tradable as usual, with pending
key reversals or trend continuation moves setting up real soon. The hint of
interest rate changes afoot from recent FOMC minutes will keep currency traders
over-reacting to any key econ news, which is exactly what we desire. Next key
catalyst comes at the Jan 31st FOMC meeting, with probable jockeying of price
action the week before.

We could see a brief period of price
consolidation near the key levels charted above and other pairs inside the full
weekend outlook report. As always we’ll trade the clear setups when they emerge,
which appear to be shaping up right now.

Trade To Win

Austin P


(Weekend Outlook trend-view section
open access)

Austin Passamonte is a full-time
professional trader who specializes in E-mini stock index futures, equity
options and commodity markets.

Mr. Passamonte’s trading approach uses proprietary chart patterns found on an
intraday basis. Austin trades privately in the Finger Lakes region of New York.