EUR/USD Tries to Dig-Out Support, S&P Bears Show during Fibonacci Resistance

Talking Points:

– US Stocks showed a bit of liberation in a latter-portion of yesterday’s session, though those gains could not reason as Fibonacci insurgency came-in after a US close, and a SP 500 is relocating right behind towards a Monday low. This exposes a double bottom from a Feb sell-off around 2,530, and if that can't reason adult on a re-test, a doorway is non-stop to bearish breakouts in a SP 500. We discussed this in yesterday’s webinar, that is accessible from a following link: SP 500 Starts Q2 on a Sour Note as EUR/USD Tests Support.

– For all of a cross-market fireworks currencies have been rather tame, and this could be a good thing for a merchant as support and insurgency has mostly remained reputable adult to this point. Below, we demeanour into a few of a some-more renouned areas by looking during a operation in a US Dollar, a build of support in EUR/USD and some insurgency areas around USD/JPY. Of sold note is a support-build in EUR/USD this morning after a unsatisfactory set of acceleration numbers were released. The fact that bulls came in to uncover higher-low support helps to prominence a continued topside intensity in a pair.

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EUR/USD Holds Support After Core Inflation Misses Expectations

EUR/USD is holding on to support after a slightly unsatisfactory recover of Mar acceleration numbers. Headline acceleration printed in-line during 1.4% for a Euro-Zone in March, and core acceleration came in usually a reason next a expectation, entrance in during one-percent prosaic contra an expectancy for a 1.1% print. Despite a disappointment, EUR/USD was incompetent to intrude on yesterday’s low that remained above a Mar swing-low, and this keeps a doorway open for topside plays in a pair as we pierce towards Friday’s recover of Non-Farm Payrolls numbers.

EUR/USD Hourly Chart: Bounce Around Inflation Numbers, Bears Unable to Take-Out Lows

eurusd hourly chart

Chart prepared by James Stanley

Yen as a Euro 2.0?

Notable here is how Japan is now saying acceleration during a faster gait than Europe. Japanese acceleration came-in during 1.5% in Feb while Europe saw that 1.4% imitation in March. We’ll have to wait to get Mar acceleration total out of Japan, though this is something that can build-in to serve Yen gains as we pierce deeper into a year. While many of 2017 was spent with markets debating a timing of a European impulse exit, with a Euro gaining for many of a year as being driven by this expectancy – it appears that a Bank of Japan will have some really legitimate questions to answer around how/why/for how enlarged QE competence run in a face of this rising inflationary vigour display around a island economy.

SP Late Session Rally Hits Fibonacci Resistance

Yesterday’s US event saw the Fibonacci support turn around 2554 reason a lows in a SP, and a late event convene quick pushed prices behind above 2600. But, that strength was incompetent to reason and after a US close, a downdraft started in SP futures that hadn’t slowed down until this morning. At this point, we’ve seen a bit of support rise above a Monday low; though it’s still distant too early to call ‘game over’ on a bearish drive, as a stream rebound could still really most be visual in nature.

The large doubt around a SP now is one of reference: Are we going to get a uninformed higher-high or lower-low to work with? Either can assistance give traders directional clues for a residue of this week as we travel towards jobs numbers on Friday. At this stage, we’re looking during continued bearish structure with another lower-high coming-in. That lower-high printed right around a 23.6% retracement of a Feb sell-off, and this exposes a 2,530 turn that we looked during yesterday.

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SP 500 Four-Hour Chart: Yesterday’s Rally Runs into 23.6% Fibonacci Resistance

SP 500 four-hour chart

Chart prepared by James Stanley

US Dollar Price Action Continues to Compress

For all of a fad in stocks, currencies sojourn rather tame by comparison. The US Dollar continues to teeter around a 90.00 turn on DXY; though a fact that we haven’t seen a lapse towards lows around 89.50 or next could be deductively bullish, during slightest on a near-term basis. This has been a very, really heavily shorted trend over a past year, and a past integrate of weeks have seen a application of volatility. On a draft below, we can see that expanding operation that had shown by Feb and early-March giving approach to a squeezing of price action. This form of application can mostly lead to a large pierce in one instruction or a other.

US Dollar Four-Hour Chart: Expanding Range Gives Way to a Compression of Price Action

US Dollar four-hour chart

Chart prepared by James Stanley

For those looking to benefit directional hues from this compression, there could be a bullish box to be done as yesterday saw prices onslaught to pierce above a forward trend-line, and during this point, we’ve seen a bit of support display around this before indicate of resistance. It’s sloppy, and it’s still really early, though it’s there for those looking to reap clues from what’s shown adult so distant this week.

US Dollar Four-Hour Chart: Bulls Struggle But Able to Hold Support For Now

us dollar 4 hour chart

Chart prepared by James Stanley

EUR/USD Digs during Range Support as 2017 Bullish Trend-Line Nears

EUR/USD continues to work within a near-term operation in aptitude to a longer-term bullish trend. The important object here was a long-legged Doji that showed adult this morning after a exam of near-term lows. Bulls have been means to reason a line adult to this point, and we continue to trade usually about 50 pips off of a Mar lows in a pair.

EUR/USD Four-Hour Chart: February/March Range Continues

eurusd 4 hour chart

Chart prepared by James Stanley

This keeps a doorway open for a enlarged side of EUR/USD as one of a some-more appealing ways to demeanour for USD-weakness. This could also be a setup that gets utterly a bit some-more appealing should a discerning spate of USD-strength assistance to propel EUR/USD into a longer-term territory of support that runs between 1.2167-1.2235.

In terms of near-term cost action, a bullish trend-line from final year’s run in a span is quick approaching; and if we’re going to reason here, support would need to uncover really quickly, as this trend-line now projects to usually next a 1.2250 area on a charts, usually next this morning’s low.

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EUR/USD Daily Chart: 2018 Range Nears 2017 Bullish Trend-Line

eurusd daily chart

Chart prepared by James Stanley

USD/JPY Tests Channel Resistance – Beware of Higher-Low

USD/JPY put in another exam of channel insurgency yesterday, during that indicate bears came in to lift prices-lower. This helps a span to keep a down-trend appeal, though those looking to work on a short-side of USD/JPY will expected wish to take into comment what appears to be a build of short-term bullish structure.

USD/JPY Four-Hour Chart: Another Hit of Trend-Line Resistance – But Beware a Higher-Lows

usdjpy 4 hour chart

Chart prepared by James Stanley

Given how clever that pierce on a short-side of USD/JPY has been so distant this year, and a bit of retracement could not usually make some sense, though it could also make a awaiting of a enlarged move-lower a bit some-more attractive, as a short-side of this trade has started to feel stretched over a past integrate of weeks. The large question, during that point, is where competence longer-term lower-high insurgency start to show?

We’ve combined dual levels of seductiveness for such a unfolding on a next chart, any of that are subsequent from areas of 2017 cost movement that have had some component of lift already in 2018.

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USD/JPY Eight-Hour Chart: Deeper Resistance Potential 107.32, 108.27

usdjpy eight-hour chart

Chart prepared by James Stanley

To review more:

Are we looking for longer-term research on a U.S. Dollar? Our DailyFX Forecasts for Q1 have a territory for any vital currency, and we also offer a engorgement of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay adult with near-term positioning around a IG Client Sentiment Indicator.

Forex Trading Resources

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— Written by James Stanley, Strategist for DailyFX.com

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