Shorts-and-longs by Alexander Kul

[alextrader79]

There is a correction on USD/CAD after sharp fall in the end of August. The pair has the potential for recovery. The Inside Bar pattern was formed on the H4 chart. I’ll buy this pair, if it fixes above 1.2335. It may move to the 1.2400 round level. This deal will be medium-term.

 

[alextrader79]

The technical picture is mixed on the majors now. Trading instruments are consolidating. Participants of financial markets are waiting for the Fed decision. Most likely, the Central Bank will leave the interest rate at the previous level of 1.00-1.25%. The regulator will publish the updated economic forecasts. It’s also necessary to take into account the FRS comments.

I’ve identified the key levels and will open deals from these marks. I think that there won’t be any strong movements before the FRS decision.

EUR/USD
support: 1.1975, 1.1930
resistance: 1.2025, 1.2100

 

[alextrader79]

USD/JPY
support: 111.10, 110.50
resistance: 111.85, 112.50

 

[alextrader79]

Yesterday, the Fed kept the key interest rate range at the previous level of 1.00-1.25%, as it was expected. This October, the regulator plans to cut assets on its balance sheet. The central bank also published some optimistic forecasts. These events caused a significant demand for the US dollar. It seems to me that the dollar will continue to strengthen against majors in the near future. At the same time, I don’t exclude a short-term technical correction. I’ll enter the market from the S&R levels. The most interesting examples are:

USD/CAD

EUR/USD

 

[alextrader79]

GBP/USD has grown by more than 400 points during the last week. Usually, there is a technical correction after such strong movements. The demand for the US dollar remains at a fairly high level. GBP/USD is consolidating now. I plan to sell the pair, if it fixes below the 1.3565 local support. It may move to 1.3475.

 

[alextrader79]

Aggressive sales were observed on the AUD/USD pair yesterday. The chairman of the RBA said that the Central Bank won’t rush to raise the interest rate. I don’t exclude a technical correction in the near future. I’ll buy the pair, if the price fixes above 0.7955. It may move to 0.7990.

 

[alextrader79]

The bullish sentiment prevails on AUD/USD since the end of the last week. It is consolidating in a rather narrow range now. I expect the further drop of the AUD/USD quotes. If the price fixes below the 0.7950 local support, I’ll sell the pair. The goal for taking profit is 0.7910.

 

[alextrader79]

Aggressive sales are observed on EUR/USD. Angela Merkel was re-elected for a fourth term. At the same time, the German Chancellor's party suffered significant losses in comparison with the past results. The price is testing the 1.1870 support level. If EUR/USD overcomes this mark, I will sell. The pair may move to 1.2825.

 

[alextrader79]

Geopolitical risks on the Korean peninsula worsened again. It caused an increase in the demand for safe assets. The bearish sentiment prevailed on USD/JPY yesterday.
The pair is consolidating in the 111.50-111.75 range at the moment. I expect the further drop of USD/JPY.
I’ll sell it, if it fixes below 111.50. The pair may move to 111.10-111.00.

 

[alextrader79]

USD/CAD is dominated by purchases now. The demand for the US dollar remains at a fairly high level. Some Fed representatives said that the US economy is stable. The central bank may consider another increase of the interest rate this year. The probability the monetary policy tightening by the Fed is more than 70%. I plan to open deals in the current trend direction. I’ll buy USD/CAD in case of the breakdown and retest of the 1.2390 mark. The pair may move to 1.2450.