USD/JPY, GBP/USD, DXY Nearing Pivotal Support Zones

Talking Points:

– The U.S. Dollar retracement continues, though we’re impending an area of support that was insurgency on a Greenback by most of 2015.

– This new retracement in a U.S. Dollar has led-to probable annulment scenarios in GBP/USD and a intensity continuation-setup in USD/JPY. Below, we demeanour during both.

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USD: Long-Term Bullish, Short-Term Bearish

In yesterday’s article we looked during a gossamer state of near-term price action in a Greenback. After a near-historic run sparked after a U.S. Presidential Election, a U.S. Dollar had small pullback or movement-lower. But after a open of a New Year, that pullback began and hasn’t nonetheless stopped. After Donald Trump talked down a ‘strong dollar strategy’ in an talk yesterday, total with this new hitch of debility –and many are doubt a sustainability of a long-term run of strength in a U.S. Dollar. But a longer-term setup is still bullish, as a Daily draft of a U.S. Dollar is throwing stream support off of a section of before insurgency around a 100-level.

USD/JPY, GBP/USD, DXY Nearing Pivotal Support Zones

Chart prepared by James Stanley

Short-term cost movement on a Greenback does not advise nonetheless that we’ve bottomed out. Below, we take a demeanour during a hourly draft along with a new hitch of ‘lower-lows’ and ‘lower-highs’ that have shown-up.

USD/JPY, GBP/USD, DXY Nearing Pivotal Support Zones

Chart prepared by James Stanley

USD/JPY – Nearing a Big Zone of Support

When a Trump-Trade took over markets in Nov and by a finish of a year, one of a highest-flying vehicles was USD/JPY. After spending most of a summer with cost movement harsh nearby a 100-level on a pair, a Donald Trump choosing and indirect convene gathering a pair-higher by some-more than 1,700 pips in a small over a month. But given a U.S. Dollar retracement has gotten underway, cost movement in USD/JPY has enervated and begun to move-lower; and this is removing many traders to try to trade a short-term annulment of bearish cost movement into a instruction of a longer-term, bullish trend.

For such efforts, traders will expected wish to stay familiar of what looks to be a outrageous section of support now sitting only underneath cost action. Within an estimate 80-pip section on USD/JPY, we have 3 opposite Fibonacci retracement levels, including a 38.2% retracement of a post-Election move.

USD/JPY, GBP/USD, DXY Nearing Pivotal Support Zones

Chart prepared by James Stanley

GBP/USD – Moving Back Down, though is a Bear Back for Good?

Yesterday brought-on a largest convene seen in a British Pound in over dual years after Theresa May’s Brexit speech. What was mostly indicted of being a short-squeeze saw cost movement burst by mixed points of before insurgency as a British Pound poked by a 1.2400 turn after carrying been next 1.2000 not some-more than dual days prior.

But given then, that bullish pierce has begun to retrace and questions-abound about either or not a bearish trend is behind in a pair. Traders looking to trade delay of a bearish pierce will expected wish to wait for some component of acknowledgment of such as yesterday’s pierce was notable in a fact that sellers relented during a before area of insurgency during 1.2300.

For traders looking to establish near-term directional position on a Cable, they’ll expected wish to observe cost movement function nearby a large section of intensity support between 1.2200-1.2250. This section had offering mixed before cost movement swings, as good as comprising both a 23.6% and 38.2% Fibonacci retracements of this week’s bullish move.

If we mangle next this section – there is small reason to be bullish as doubt would’ve taken over cost movement in a British Pound again.

USD/JPY, GBP/USD, DXY Nearing Pivotal Support Zones

Chart prepared by James Stanley

— Written by James Stanley, Analyst for DailyFX.com

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