US dollar or how we call it, Ms. USA took the lead on the forex dance floor Tuesday morning and dragged most of her major counterparts down.
Change in the total value of sales at the retail level, excluding automobiles came in at 0.4%, worse than the expected 0.7% but still higher than last month’s 0.0% which means this fall of USD could be temporary.
USD/CHF 4 Hour: Testing 23% Fibonacci Level at 0.9704
Suggested positioning: Short position below 0.9704 with targets at 0.9623 and 0.9445 in extension
Technical reasons why: The pair faced a bearish sentiment on bad US retail sales data and currently testing the 23% Fibonacci level while remaining above the Ichimoku cloud. A break below this level could open doors for more down moves towards previous support and 38% Fiboa at the 0.94 level
Alternative Scenario: Above 23% Fibonacci level of 0.9704 look for more up moves with 0.98 as first alternative target.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9623 | 0.9704 | 0.98 |
| 0.9445 | 1.0115 |
EUR/USD 4 Hour: Caution needed on going bullish
Suggested positioning: Long positions above 1.0655 with targets set at 1.0720 and 1.0780 in extension.
Technical reasons why: The pair faced a bullish sentiment on bad US retail sales data and currently testing the 23% Fibonacci level while remaining below the Ichimoku cloud. Given the fact that the pair has recently completed a double top chart pattern, we could see more up moves towards higher levels of Mr. Fibonacci.
Alternative Scenario: If the pair is unable to confirm a break above 23% Fibonacci level, we could see further drops back to support levels at 1.0550 and 1.0470.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.0550 | 1.0655 | 1.0720 |
| 1.0470 | 1.0780 |
AUD/USD 4 Hour: Forming a possible Double Top Chart Pattern
Suggested positioning: Long positions above 0.7731 with target set at 0.7848
Technical reasons why: Unable to break below a key support level, the pair is rebounding towards the Ichimoku cloud and our pivot point at 0.7731. A confirmation above the neckline of the Double Top pattern is needed before entering a bullish position. The RSI is flattening in the neutrality area which indicates lack of enough bullish sentiment, therefore caution is needed.
Alternative Scenario: If the pair is unable to confirm a break above the turning point or the Ichimoku cloud, we could see further drops back to support level at 0.7554
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.7554 | 0.7731 | 0.7848 |
