The shiny days for Ms. USA seems to have hit a pause button. The ultra dovish tone of the Fed seems to have reduced the enthusiasm of investors who in the past month were very eager to invest in the American currency. The FOMC has become more concerned about the weak global growth and the impact of a strong US dollar on American export situation and domestic economy.
Chances are though that we will be seeing a rate hike in the United States by the second half of the year. At the same time, we’re seeing fractures elsewhere in economic growth such as Europe.
While other major currencies including the Euro, British Pound and the Aussie dollar saw down moves while Ms. USA is on a pause, her Asian buddy, Mr. Japanese Yen has fallen into a confusion session as well. Despite calls to boost their stimulus program, the Bank of Japan still decided to sit on its hands and keep monetary policy unchanged. Maybe Mr. Kuroda isn’t feeling the pressure to add stimulus since the yen’s depreciation is pushing price levels higher and helping the economy move closer to achieving its inflation target.
Personally I’m still holding on to my long-term USD/JPY bullish position, just because I still can afford the current losses.
USD/JPY 4-hour: Consolidating.
Invest Diva Likes: Short positions below 108 with target at 106.71 and 105.67 in extension.
If Pair Goes Nuts: Above 108 look for further upside towards 109.17 and 110.08.
What’s up on the Forex Dance Floor: The pair is now consolidating around the neckline of a possible Double Top pattern at 108. Failing to move down from the neckline would switch our outlook back to bullish. The RSI is however below the neutrality area and shows that the pair is under pressure
Supports and Resistances
110.08
109.17
108 Pivot Point
106.71
105.67
EUR/USD 4-hour: Down insidethe Ichimoku’s cloud.
Invest Diva Likes: Short positions below 1.2600 with 1.2509 and 1.2385 in extension.
If Pair Goes Nuts: Above 1.2666 look for further upside towards 1.2763 and 1.2844.
What’s up on the Forex Dance Floor: The pair failed to break above the key level at 1.2763 and is back inside the Ichimoku’s cloud. The RSI is around the neutrality area.
Supports and Resistances
1.2844
1.2763
1.2666
1.2600 Pivot Point
1.2509
1.2385
GBP/USD 4-hour: Rebounding from 50% Fibonacci
Invest Diva Likes: Short positions below 1.6084 with targets at 1.5959 and 1.5866 in extension.
If Pair Goes Nuts: Above 1.6084 look for further upside towards 1.6162 and 1.6224.
What’s up on the Forex Dance Floor: The pair failed to break the 50% Fibonacci level and is now moving below the Ichimoku’s cloud. The RSI is below the neutrality area.
Supports and Resistances
1.6224
1.6162
1.6084 Pivot Point
1.5959
1.5866
AUD/USD 4-hour: Moving down.
Invest Diva Likes: Short positions below 0.8758 with targets at 0.8659 and 0.8502 in extension.
If Pair Goes Nuts: Above 0.8758 look for further downside towards 0.8828 and 0.8934.
What’s up on the Forex Dance Floor: The pair broke below the Ichimoku’s cloud with the RSI below the neutrality area. Also one of the largest international brokers says that 70% 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
0.8934
0.8828
0.8758 Pivot Point
0.8659
0.8502
