Trend Line Analysis : 10/08/2015

Introduction to Trend Line Analysis
Welcome to our newest feature; Trend Line Analysis. Our professional market technician showcases intraday / swing trade setups on a broad spectrum of FX currency pairs. The most effective way to use the setup are:
▪ If indicated price zone holds; consider partial profit taking between 20-40 pips before aiming for the maximum listed target.
▪ If the price zone fails to hold; we likely to see price moving against us. Fail means; the candle closing higher or lower to indicated price zone.

 

Last week main event was the NFP; which left traders grasping for more air . As per the expectations the result came with spike on major USD pairs to rally initially and then drop big before at later stage they were able to recuperate losses and some even hitting new daily highs . While most traders expect US to increase rate hike in September there is another camp that think Fed can delay the hike beyond September.

This caused uncertainty and we just may see US Dollar on the defensive mode. The overall picture though still is bullish.

EURUSD

We are looking to set shorts up on a T2 test and a hold for a potential 100 pips drop and would look for a holding pattern towards 1.089X to consider longing for a potential break higher to T2 for a move towards 1.109X.

Friday’s NFP  missing expected targets was well within the broader range and saw a mixed and a confuse reaction.  EURUSD initially surged higher towards 1.097X before falling head down to 1.0855. From there on; it took off with almost the same pace it dropped and succeeded in printing new daily highs. It also closed well above the high print of Pre-NFP high of 1.0950.

NFP could have done a better job for the US Dollar; but it seems the traders are having a mix feeling towards the most anticipated rate hike expected in September. Some suggesting with continue lingering on, by the Fed’s on the expected rate hike; it just may get prolong further. This uncertainty can fuel short term covering on the US Dollar and therefore we can expect US Dollar to be on a defensive mode. We have FOMC member Lockhart to speak later in the US session and he will be entertaining questions & answers. We can expect some movement on the USD majors if there are any hints been dropped on question regarding rate hike.

Hence; we feel shorts likely to work out if can test T2 and shows holding for an initial drop of 100 odd pips; before either we hold to or around 1.089X and bounce or breaks it testing Friday’s lows.

EURUSD 4 hrs - Potentially looks heading higher after initially been lower
EURUSD 4 hrs – Potentially looks heading higher after initially been lower
EURUSD 30 mins - T2 possible zone to long upon test & hold out
EURUSD 30 mins – T2 possible zone to long upon test & hold out

EURAUD

We are looking to see a possible test of T3 and a hold to consider going long for a 1.4900 handle with potential run to 1.5000.

The pair has been correcting on heavy tone and slightly over 500 pips from the 1.527X high print. We are mainly looking at a channel within the black trend lines and as such T3 comes in as the base zone and this is where our interest lies on taking a long position if shows a hold upon it’s test.

AUD has been enjoying rally when last week RBA failed to mention their likeness towards lower AUD and along with improving labor market; AUDUSD lifted off from 7260 lows and posting a 7429 high. There is still room to make it to 747X technically speaking and hence we can see a possible test of T3 on the EURAUD.

T3 therefore comes in as an important support if comes into play and a hold to it would encourage to try longs for a possible 1.4900 handle with potential run to 1.5000.

EURAUD 4 hrs -  T3 test & hold looking to long for T2
EURAUD 4 hrs – T3 test & hold looking to long for T2

AUDUSD

WE are looking to see a test of T2 and upon a hold; like to enter shorts for a possible move towards 735X.

AUDUSD and it’s crosses are enjoying relief rally; ever since change of heart from the RBA  and it’s shift in stance from been dovish to coming out sounding hawkish.

However; we are looking at T2 which comes in as a decent looking resistance on rallies which was acting as a  support earlier.

Hence will look for a possible move towards the expected resistance and if comes into play and shows holding to it; like to enter shorts in anticipation that correction ends to it.

AUD 8 hrs - T2 important resistance now
AUD 8 hrs – T2 important resistance now

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