In the next 24 hours, we could get these 2 entry signals


Dave Floyd is a professional FX and stock trader based in Bend, OR and the
President of Aspen Trading Group. Dave’s approach to FX combines technical
and fundamental analysis that results in trades that fall into the swing
trading time frame of several hours to several days. For a free trial to
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Turning To The Crosses

For the most part, I spend my days following the
‘action’ in GBP, AUD, NZD & NOK versus the U.S. dollar. However, in recent days,
despite an overall move higher, the dollar (via the Dollar Index, DXC) has
proven to be a bit of a challenge unless your views were longer-term, a week or
more in terms of trade duration. I have experienced these scenarios before; that
is the nature of financial markets, to keep you on your toes. My decision for
the near-term is to avoid dollar based pairs until better price action
re-appears.

Oddly enough, I began seeing some intriguing
technical patterns on the daily charts of some of the FX crosses, most notable
EUR/GBP and EUR/SEK (see

Friday’s article
). These trades are based simply on the daily chart pattern
and not terribly concerned about the lower time frames that I normally monitor,
60 and 240-minute charts. In addition, since they are longer-term based, the
fundamentals also seem to weigh in favor of lower levels.

We advised our clients to short EUR/GBP based on
our assessment of the chart pattern. What we like most about this trade is its’
lack of a tight correlation to DXC. It is hard to refute the price action in DXC,
but too many people I talk to each day remain a bit skeptical about this recent
rally, I being one of them too.

AUD & NZD Outlook
(24-hours)

AUD/USD:

Late last week it was beginning to look as though
higher commodity prices would begin to underpin AUD/USD. On Friday, with the DXC
rally, it appeared that this would not pan out. However, after the overnight
performance on AUD/USD, it appears that AUD/USD is poised to move higher on any
modest pull-backs in DXC. We see a break above .7630-45 allowing for a move
towards .7675 while .7580 should provide decent support.

NZD/USD:

A similar situation in NZD – any DXC weakness
will propel kiwi higher. While kiwi is not terribly well correlated to commodity
prices it is a currency that benefits when traders/investors are seeking yield –
which currently seems to be the ‘theme’ as FX markets are range-bound and
tricky. Look for a move toward .6980 on a break of .6945. Both of the levels
just mentioned are key resistance levels as they represent the 200 and 50-day
ema’s respectively.

Support is seen at .6880.

As always, feel free to send me your comments and questions.

Dave

Dave Floyd is a professional FX and stock trader based in
Bend, OR and the President of Aspen Trading Group. Dave’s approach to FX
combines technical and fundamental analysis that results in trades that fall
into the swing trading time frame of several hours to several days.