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Currency Pair Overview:
Usd Held At Resistance On Triple Witching Friday
The major currencies were helped by S&P futures and by the cash equity market in gaining a few pips during the overnight session. However, compared to the sell-off seen over the last two weeks of trading, this intra-day uptrend is very small. Unless the cash and equity markets continue to stay into the green during the day, another round of Usd buyers might join the market during the upcoming U.S. session.
The one thing that may hold fair value on most markets is the expiry of December, quarterly, and yearly U.S. option contracts today.
Dollar Index Technical View: TheLFB Member Charts
4 Hour Chart Flows: Long Price Points: 78.00 Looking for: A Short wave IV) pull-back, towards 76.50
Momentum: The dollar index went into Long mode on in early December and has held that trend since. The near-term path of least resistance is consolidation around new highs, with long-bounces on weak equity trading days. The weekly close above 76.00 was a signal that buyers are dominating, is bullish and signals a momentum reversal.
Elliott Wave: The dollar index has made a turning point around the 78.00 resistance area, where a Long, blue wave III) may finally have found the highs. A three wave move of a pull-back into a lower wave IV) should follow, because after every five waves move finishes, Elliott wave traders will look for a correction, labeled as a black a-b-c in our case.
As long the 78.00 high stay in place, prices could fall into the 76.50 zone.
The euro (EUR/USD 1.4390) had an effective range of approximately 30 pips during the overnight session, swinging around the 1.4390 area, near the neutral pivot point. Similar to the entire market, most of the gains seen overnight came during the Asian session, while the pair traded flat in European trade. On the daily chart, the euro is trading between the 23.6% and the 38.2% retracements of the uptrend that started in March 09.
TheLFB Trade Plan of the Day is one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, as well as S&P futures, oil, gold, and the dollar index.
The pound (GBP/USD 1.6205) is currently testing the 1.6200 area, which has been an important support during the last week of trading. A break higher would shift the pound’s short-term outlook to mixed, from the current sell, but this move will have to come on strong momentum. On the higher time-frames, the pound is trading in a descending triangle.
The aussie (AUD/USD 0.8880) saw strong trading activity around Friday’s open, plunging 60 pips and then recovering every pip lost in a short period. On the daily chart, the aussie is consolidating above the 100-day moving average, the same place where the market based in Thursday trade.
The cad (USD/CAD 1.0665) showed bearish momentum even from the Asian session, but until now, the pair has failed to break below the 1.0660 area. A move lower might allow the cad to test the 1.0550 area, which has been an important intra-day swing point over the last few weeks. At 08:30 EST, the market is expecting the Canadian Wholesale Sales, but usually this report has little influence in the market.
The swissy (USD/CHF 1.0420) is again trading in the 1.0400 area, shedding every pip that the pair gained in Thursday trade. Against the euro (EUR/CHF) the swissy posted strong losses over the last two days of trading, dropping as much as 180 pips, to reach the lowest value since March. However, the market retraced a part of today’s sell-off against the euro.
The yen (USD/JPY 90.20) was the most active pair during the overnight session. Throughout Asian trade the yen plunged 100 pips following the BoJ’s interest rate meeting that held rates. However, from there, the yen started retracing and right now, it is trading 30 pips above Friday’s opening price. On the medium to long term, the yen’s outlook is long.