Filed Under:
  • USDJPY endures 3rd December reversal day; GBPJPY short setup
  • EURNZD and GBPNZD nearing support levels
  • USDMXN responds to support; trade is open
Friday’s DailyFX Plus webinar highlights developments and levels to watch in the Europe/Commodity FX pairs. (video is titled JamieTrading12132013).

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Jamie is the author of Sentiment in the Forex Market.

USD/JPY

Daily

USDJPY_Trades_to_2013_and_Reverses_Trade_Setup_in_GBPJPY_body_Picture_5.png, USD/JPY Trades to 2013 High and Reverses; Trade Setup in GBP/JPYChart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-USDJPY traded to a new high for the year on Friday but reversed sharply. The high is not accompanied by a high in the Nikkei, which does the raise the possibility of a deeper drop. 3 daily reversal bars since 12/3 (2 are outside days) is also cause for concern.

-Still, the ‘trend extension’ setups described last week is valid as long as price is above 102.14. Weakness below there would open up the possibility of a deeper drop. 100.60-101.13 would be on the radar as possible support.

-A bullish objective of 105.12 is derived by calculating the measured move from the 103.37-101.61 dip. A close from Oct 2008 remains uncovered at 105.30.

Trading Strategy: Looking for support in the 102.65/95 region for longs against 102.10.

GBP/JPY

4Hour

USDJPY_Trades_to_2013_and_Reverses_Trade_Setup_in_GBPJPY_body_Picture_4.png, USD/JPY Trades to 2013 High and Reverses; Trade Setup in GBP/JPYChart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-I concern myself with trade setups and risk, not predicting what will happen next. As such, the GBPJPY may be setting up for a short.

-Price has broken through the trendline that extends off of the 11/19 and 12/5 lows. The line crosses through the 12/11 and 12/12 bars as well. From here, a ‘drift’ into the underside of the line early next week may present an opportunity to go short. 168.80 is estimated resistance.

Trading Strategy: Possible top so monitor for failure near 169 for a possible short. If this trade is taken, then plan on exiting a portion at 166.40.

EUR/NZD

4Hour

USDJPY_Trades_to_2013_and_Reverses_Trade_Setup_in_GBPJPY_body_Picture_3.png, USD/JPY Trades to 2013 High and Reverses; Trade Setup in GBP/JPYChart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-I’ll have more on the longer term picture in EURNZD in the upcoming “Top Ideas for 2014” but near term support in the rate is estimated near 1.6485 and trendline support.

-Trade since 11/29 may prove nothing more than consolidation before the next leg higher.

-A minor upside objective is just a test of the high in August at 1.7275 although a reaction could be seen from the 8/28 close at 1.7100.

Trading Strategy: Monitoring for support at 1.6485 and/or the upward sloping trendline.

GBP/NZD

4Hour

USDJPY_Trades_to_2013_and_Reverses_Trade_Setup_in_GBPJPY_body_Picture_2.png, USD/JPY Trades to 2013 High and Reverses; Trade Setup in GBP/JPYChart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-I’m of the mind that EURNZD upside potential is greater than GBPNZD upside potential given this week’s follow through in EURGBP on the prior week’s large range key reversal. Still, this rate is worth a look and could help better time a EURNZD long anyway.

-Bottom line, 1.9550 is estimated support. That level is marked by the 10/25 high and 11/26 low. 1.9550 and trendline support intersect on 12/19 (Thursday).

Trading Strategy: Same as EURNZD…monitor for support at 1.9550.

USD/MXN

Daily

USDJPY_Trades_to_2013_and_Reverses_Trade_Setup_in_GBPJPY_body_Picture_1.png, USD/JPY Trades to 2013 High and Reverses; Trade Setup in GBP/JPYChart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-Tis a tale of trendlines in USDMXN. Last week, price traded into and reversed from the resistance line that originates from the 2012 high. This week, the rate reversed just before the line that originates from the Jul low.

Trading Strategy: I wrote last week that “just know that the market is coiled for a large move. Price needs to stabilize before entertaining longs.” The market has stabilized. I am long with a 12.80 stop. A drop below 12.80 would shift focus to 12.70. The target is 13.16 (trade the range as long as it’s in the range).



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