I’m ready to tackle the forex market head on! Are you? Here’s what I plan to do in the next few days!
Last week was pretty darn interesting to say the least! For the most part, rate statements moved currencies.
The euro, for instance, rallied on Thursday as ECB President Mario Draghi surprisingly sounded upbeat and hawkish during the ECB rate decision when he hinted that rate cuts won’t happen anytime soon.
Meanwhile, both the pound and the yen traded lower following the BOE and BOJ rate statements as the two central banks didn’t make any changes to monetary policy.
Market sentiment also dictated price action. Risk appetite boosted higher-yielders and sent the dollar and the yen trading lower.
It’s noteworthy to point out that the dollar rallied following the better-than-expected NFP report. There had been talks about the currency trading based on fundamentals and its reaction to the strong employment report only affirms this assumption even more!
I wonder if we’ll see the dollar rally on the heels of positive U.S. data in the next few trading days. What do you think? Anyhow, here are the setups I’m looking at for this week:
I still think that the pair would continue trading lower. I’m looking to jump in on the downtrend when GBP/USD pulls back a bit and tests the falling trend line, Fibonacci retracement levels, and previous support area around 1.5000. Should reversal candlesticks materialize, I’ll be ready to pull the trigger!
EUR/USD: Slightly Bearish
The pair seems to have found support at a former low. With the SMAs starting to move horizontally, I think the pair is beginning to range. But given the overall downtrend on the longer-time frames, I’m just not that confident in buying yet, so I’m going to wait for a short entry before jumping. I’m closely watching the 1.3100 region for a potential short setup, as price found resistance here before.