Today’s Forex Guide

More Dollar Strength


Oct.03.2014

un deux trois and dollar is back on its bullish track again!

Plenty of positive US data made up for the recent temporary dollar weakness and Ms. USA jumped high up against all of her major counterparts this morning upon New York session. The data included much better-than-expected non-farm employment change, and mildly better unemployment rate.

While the positive reading created another wave of investor sentiment into the US dollar market, it could also a very political move related the battle with Russia and one method to attack the Russian economy by the US government. Russia's rouble hit an all-time low at 39.95 against the dollar on Friday after strong U.S. jobs data boosted the U.S. currency. The rouble has been under heavy selling pressure for months due to falling oil prices, sanctions over the Ukraine crisis and strong demand for dollars from Russian firms shut out of international capital markets.

strong dollar

In the UK, the services PMI came out worse than expected, and the combination of the Pound weakness and dollar strength crashed the GBP/USD pair on the forex dance floor.

Over in Asia, tensions in Hong Kong look like they've caused the fourth straight weekly close lower for the region's stock markets. Led by the Hang Seng, which is down more than 4% this week and has now officially entered a correction phase - having fallen more than 10% from its September peak. HK's Chief Executive yesterday refused to step down, but has agreed to talks with demonstration leaders.

Another area worth a brief mention is Turkey, who yesterday authorised military action as ISIS action at a Syrian border town has led to a refugee surge into Turkey. The news isn't likely to be particularly positive for the Turkish economy or currency, but it is surprising they have managed to stay out of the conflict for so long, given that they are a NATO member and that they share borders with Syria and Iraq.

 

Intraday Forex Technical Levels


EUR/USD 4-hour Forex Dance Floor
EUR/USD 4-hour: Downtrend prevails.

Invest Diva Likes: Short positions below 1.2600 with targets at 1.2509 and 1.2385 in extension.

If Pair Goes Nuts: Above 1.2600 look for further upside towards 1.2666 and 1.2763.

What's up on the Forex Dance Floor: The pair continues on an overall downtrend below the Ichimoku's cloud and is now teasing the previous support level at 1.2600 after rebounding. A break below this level could open the door for further drops. The RSI is heading towards the oversold zone.

Supports and Resistances
1.2763

1.2666

1.2600 Pivot Point

1.2509

1.2385


GBP/USD 4-hour Forex Dance Floor
GBP/USD 4-hour: Continues down.

Invest Diva Likes: Short positions below 1.5998 with targets at 1.5924 and 1.5866 in extension.

If Pair Goes Nuts: Above 1.5998 look for further upside towards 1.6069 and 1.6171.

What's up on the Forex Dance Floor: The pair broke down the previous low at the 1.6069 and continues to drop as forming a strong bearish candle below the Ichimoku's cloud. The RSI reached the oversold zone. Also one of the largest international brokers says that 62% of traders are long the pair. Using this market sentiment index as a contrarian signal, the combination of the technicals and current sentiment gives a further bearish bias.

Supports and Resistances
1.6171

1.6069

1.5998 Pivot Point

1.5924

1.5866


USD/JPY 4-hour Forex Dance Floor
USD/JPY 4-hour: Break above the Ichimoku's cloud.

Invest Diva Likes: Long positions above 109.17 with target at 110.08 and 110.52 in extension.

If Pair Goes Nuts: Below 109.17 look for further downside towards 108 and 106.71

What's up on the Forex Dance Floor: The pair broke abovethe Ichimoku's cloud with the RSI moving up above the neutrality area.

Supports and Resistances
110.52

110.08

109.17 Pivot Point

108

106.71


AUD/USD 4-hour Forex Dance Floor
AUD/USD 4-hour: Rebounding from the Ichimoku's cloud.

Invest Diva Likes: Short positions below 0.8696 with targets at 0.8659 and 0.8502 in extension.

If Pair Goes Nuts: Above 0.8696 look for further upside towards 0.8750 and 0.8825.

What's up on the Forex Dance Floor: The pair is rebounding from the lower boundary of the Ichimoku's cloud after consolidating around the level at 0.8825. The RSI is heading below the neutrality area.

Supports and Resistances
0.8825

0.8750

0.8696 Pivot Point

0.8659

0.8502

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