EURUSD/EURJPY
EURUSD remains below the 1.25000 area in NY trading today.
The EURUSD has been consolidating during the US session (see earlier post HERE). The price has been able to stay below the 38.2% -50% retracement area of the move down from today’s high to today’s low (yellow area in the chart above). The price also found sellers around the 1.2500 area. This was the low from October 3rd. There has been one 5 minute bar that has closed above the 1.2500 level in NY trading today and that was at 1.25005. So sellers remain in control.
The market did push the pair to new lows at the 1.2456 level. However, this remains above the low price reached during Monday’s trade at 1.24386.
With a current price trading around 1.2485, the market seems to be positioning itself near the 1.2500 level (the October 3 low price) but above the low for the year, before the key ECB interest rate decision and statement scheduled for 7:45 AM ET tomorrow morning. ECB President Mario Draghi will give his usual press conference starting at 8:30 AM ET. The expectation is that the ECB will need to keep the dovish rhetoric going. The BOJ additional bond buying stimulus has not given the ECB much leeway. The EURJPY is up strongly since the last meeting when the price was near low levels for the calendar year (the low for the year was reaches on October 15th). Now, the prices near the higher levels that have contained the range for most of 2014 (the high for the year was reached on the first trading day of the year at 144.86). This is particularly hurtful to German trade and competitiveness.
EURJPY trades near high levels for 2014
GBPUSD
GBPUSD trading above the 50% of the days range but having trouble against the 100 hour MA.
The GBPUSD is trading back toward the 100 hour MA (blue line in the chart above). The price action in the pair was that “V” formation today. During the London morning session, the price trended lower, with the pair making new year lows at 1.58678. The problem was it only took out the previous low by 5 pips and the short covering began.
The move off the short covering highs took the price down to the 1.5944 level (50% of the move down today – SEE post from earlier today outlining this level of support). The buyers and sellers are bloody-ing each other in trading today. If the buyers are to start winning the fight against the sellers, they will need to get and keep the price above the 100 hour moving average (at 1.5984) and then make a runs above the 1.6000 level and then the 1.6020 area (200 week MA and highs this week).
So far this week the ceiling against this area has held like a charm. The problem is the moves lower on Monday and today have seen quick bounces. With the range for the week at about 150 pips, I would expect either the high or the low will see an extension before the week comes to an end. What happens around the 100 hour MA right now, may give us the clue for the directional bias – move and close above, look for that extension higher. Stay below and that may favor the sellers. Just a thought.
USDJPY
The USDJPY is about above the 114.65 or below the 114.65 now.
The 104.65 level I talked about as a level to eye in the morning forex technical trading post (CLICK HERE). This is the high price going back to December 2007. The price today has has two runs above this level. Each failing. The last move lower was able to break below the 100 bar MA on the 5 minute chart (see blue line in the chart above), but the momentum faded before the 38.2% retracement of the move up today at the 114.28. Now the price is hanging below the 114.65 but above and below the 100 bar MA. Like the GBPUSD, what happens at this key level may determine new highs or a look back toward the 38.2% (and 200 bar MA – green bar in the chart above).
What we know is the trend is higher, there was a chance to go lower. That chance stalled. I have to respect the upside and the trend. So if the price gets above 114.65, I will be watching closely to see if the momentum higher returns. There are windows to short anything with JPY but those windows are tending to close quickly.
