Forex Daily Roundup – 9/12/2016

The most action induced movement we saw today was after the Fed’ Brainard spoke about monetary policy. She was relatively dovish, sending stocks higher, the USD lower, and leaving us with few clear trends to trade going forward:

screenshot-2016-09-12-13-22-24

Let’s briefly (and for some pairs it will be very brief) look at each pair:

EUR/USD

There’s not much more to say about the Euro, so I’ll leave you with this chart:

screenshot-2016-09-12-13-25-43

The break of this triangle consolidation will be the key to the next move in the pair. Price is getting some support from the 50 and 200-bar SMA’s, but I’m not willing to bet on direction here yet. On the sidelines.

USDCAD

If you were hoping for a break of the USD/CAD range, you were disappointed yet again. The pair failed at the top trend line resistance:

screenshot-2016-09-12-13-27-26

This would have been a nice trade if you were stalking it, but we continue to wait until this range breaks to ride a larger trend. The wait continues today…

AUD/USD

The Aussie also stuck in a range, but the pair found support against the 100-day SMA today as it has in the past:

screenshot-2016-09-12-13-28-55

Today’s move was largely attributed to a weaker USD, but Aussie’s resilience is likely carry trade driven as the positive yield is far more appealing to move countries’ near zero or negative yields. We’re seeing the same thing in the Kiwi, and I prefer looking to that pair for trades as it’s not range bound like the Aussie. We currently have a nice trade in NZD/USD going in our Patreon group that’s now in the money, and I’m expecting to get more from it yet.

USD/JPY

I’m still very much intrigued by the 4-hour USD/JPY chart:

screenshot-2016-09-12-13-32-26

The 100-bar SMA has officially crossed the 200-bar SMA. That’s usually a bullish indicator, but the cross over has been relatively lazy, and the pair is clearly consolidating. It will be interesting to see what happens next, but I believe the market is discounting a scenario where USD/JPY rips higher.

There’s not much more to say about this pair for now, but I’m keeping a close eye on it (unlike EUR/USD, AUD/USD, or USD/CAD). I just think there’s more potential here to see a decent move, one way or the other.

GBP/USD

In yesterday’s outlook I mentioned that there was a nice confluence of support not far below Sterling’s then current price. I didn’t take the trade (as mentioned), but I did expect the pair to move higher. And that’s exactly what it’s done:

screenshot-2016-09-12-13-36-31

And I think it will continue to do so, even if it’s a bit slow to make it happen. That said, I still prefer to get my Sterling exposure via EUR/GBP shorts and GBP/JPY longs. The former is doing excellent for us and the latter is hanging in there. I’ve been covering EUR/GBP within our Patreon group, and it’s been a nice change of pace to trade a slower moving pair.

GBP/JPY

Geppy found support overnight ahead of the 100-bar SMA on the 4-hour chart:

screenshot-2016-09-12-13-39-47

All three SMA’s are purely aligned to the upside, keeping intact my bullish bias. We’re essentially trading in what I would consider a bullish flag, and I think (and hope) a breakout higher is imminent. We have a long position on that’s slightly underwater here, but I still like its long-term potential of a visit to the 140-142 zone at which point we’d reassess.

 

There’s really not much to say about today’s action. It still feels like the summer doldrums are here, which can make for sleeping trading conditions, which can make traders antsy. My advice is to remain patient, tend to the positions you have on, and take your time finding and entering anything new. Our plan is to ride our NZD/USD longs and EUR/GBP shorts, likely adding to the latter when and where it makes sense. When you’re able to find a good setup in this environment, you really want to make sure you squeeze as much potential out of it as possible. The worst thing you can do is identify a good trade, take it, and then cut it early. Because you may not find another solid setup for awhile!

Geppy

I've been involved in the forex markets for over a decade, initially starting as an FX trader at Allston Trading in Chicago. Eventually I went on and founded my own (non trading related) company. I spend my days working from home and trading forex, equity, and crypto markets.

2 thoughts on “Forex Daily Roundup – 9/12/2016

    1. Hi Jon, I have no opinion on EUR/USD beyond my neutral stance. As I said, the pair is extremely range bound so there’s no sense in speculating until it breaks one way or another.

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