Watch this pair — It’s close to triggering an entry!
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
Dave Floyd’s Daily Forex Alerts,
Good morning.
The FX markets continue to throw plenty of curve balls as demonstrated by
the gap higher on Sunday afternoon in DXC (Dollar Index). There was a brief move
higher late in the day towards 88.80 but it has since settled back to 88.52 –
right in the general area that DXC opened. We are not too proud to admit that
the gap higher was very surprising and unexpected, especially given the sell-off
on the close on Friday.
Prices are now well above the 50-day EMA at 87.85 and the up-trend is clearly
intact. The only potential pull-back might be seen if the fib time cycle for
today were to take hold. However, with the FOMC meeting tomorrow, markets may
remain sideways until the decision in announced at 11:15 AM PDT on Tuesday.
AUD & NZD:
Both pairs are weak on heels of DXC strength, however, both are now sitting on
solid support at their 50 & 200-day EMAs. AUD’s 50-day EMA is at .7630 and NZD
finds itself at a confluence of the 50 and 200-day EMA at .6985.
On NZD, the trend and momentum is clearly down but if the wave count is correct,
.6940-50 might result in a wave 4 completion and act as a floor in terms of
lower prices.
GBP/USD:
Managing to claw its way back above the 50-day EMA at 1.8065 but the overall
trend and momentum remains lower so rallies for now will need to be treated with
suspicion and may likely end up offering fresh short entries. Look for 1.8075 to
be the first real test to any bounce. A move through here might result in a some
further upside.
USD/NOK:
While this pair does not always register on our radar screen for trade set-ups,
we do monitor it because when it does move – it is a good trader. Currently we
see a potential set-up that might take hold if DXC strength remains. With the 50
and 200-day EMA just above at 6.4075 and 6.4300 respectively, we see the
pull-back towards 6.3870-6.400 as offering a potential area to establish long
positions. we will advise as the trade sets up.
NZD/CAD:
We are now fully engaged in the price action of NZD/CAD and are very close to
re-establishing a short position, however, we are somewhat reluctant to add any
new positions until the FOMC has done its thing.
As always, feel free to send me your comments and
questions.