Good thing Monday was pretty light on economic data because it gave all traders time to catch up on Golden Globe gossip.
But if you’re looking to trade the euro or Aussie dollar this week, then you might want to take a closer look at the technical analysis and the supporting fundamentals before making your trading decision.
Despite the impressive non-farm payroll data which showed employment has got much better in the US, the US dollar didn’t show much dance moves on the forex dance floor the start of the week. We blame it all on the Golden Globes and the Pentagon Social Media hack by ISIS.
Oil continues to move down and settled at the 46 level on Monday’s New York session, which means more gains for the US dollar.
EUR/USD remains on a downtrend but formed a spinning top candlestick pattern on the daily dance floor after reaching our previous bearish target at 1.1880. Our next bearish target remains at 1.1635, but seriously, how low can EUR/USD go? If the Greeks decide to exit the Eurozone, we could see even more drops in the pair.
Mr. Aussie reached our bearish target at 0.808 as he dance against Ms. USA, and then bounced up. At least we got to make some delicious pips before he changed directions. So now the pair could have a correction towards our pivot level at 0.831 or a Fibonacci retracement level like the 23% or the 38%, before heading back down to our next bearish target at 0.773. Thursday’s Aussie employment change data (1:30 am GMT) could set the direction for Mr. Aussie on the forex dance floor for the remaining days of January.
For the month of December, a mere 5.3K increase in hiring is expected, far weaker compared to November’s 42.7K gain and October’s 13.7K rise. In this case, the report would indicate a sharp downturn in employment, which could weigh on Australia’s spending and growth figures later on. Also, with a weak pickup in hiring expected, Australia’s jobless rate is unlikely to budge from its 12-year high of 6.3%.
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Intraday Forex Technical Levels
GBP/USD 4-hour: Consolidating.
Invest Diva positioning: No positions.
Technical reasons why: The pair is consolidating below the key resistance level at 1.5173 below the Ichimoku’s cloud after hitting the bottom level at 1.5052. The RSI is at the neutrality area.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5052 | 1.5173 | 1.5375 |
| 1.4954 | 1.5273 |
AUD/USD 4-hour: Consolidating.
Invest Diva positioning: Short positions below 0.8145 with targets at 0.8036 and 0.7879 in extension.
Technical reasons why: The pair is consolidating at our pivot level at 0.8145 above the Ichimoku’s cloud. The RSI is above the neutrality area.
Alternative Scenario: Above 0.8145 look for further upside towards 0.8250 and 0.8322.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.8036 | 0.8145 | 0.8322 |
| 0.7879 | 0.8250 |
USD/CHF 4-hour: Consolidating.
Invest Diva positioning: Long positions above 1.0162 with targets at 1.0307 and 1.0426 in extension.
Technical reasons why: The pair is about to break above our pivot level at 1.0162 above the ichimoku’s cloud. The RSI is above the neutrality area.
Alternative Scenario: Below 1.0162 look for further downside towards 1.0052 and 0.9963.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.0052 | 1.0162 | 1.0426 |
| 0.9963 | 1.0307 |
USD/JPY 4-hour: Failed to break below the key support level.
Invest Diva positioning: Long positions above 117.98 with targets at 119.30 and 120.63. in extension.
Technical reasons why: The pair failed to break below the key support level at 117.98 while remaining below the Ichimoku’s cloud. The RSI is moving around the neutrality area.
Alternative Scenario: Below 117.98 look for further downside towards 115.59 and 113.66
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 115.59 | 117.98 | 119.30 |
| 113.66 | 120.63 |
NZD/USD 4-hour: Broke below the Ichimoku’s cloud.
Invest Diva positioning: Short positions below 0.7747 with targets at 0.7694 and 0.7607 in extension.
Technical reasons why: The pair broke below our pivot level and the Ichimoku’s cloud. The RSI is below the neutrality area.
Alternative Scenario: Above 0.7747 look for further upside towards 0.7834 and 0.7887.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.7694 | 0.7747 | 0.7887 |
| 0.7607 | 0.7834 |
USD/CAD 4-hour: Broke above the key resistance level.
Invest Diva positioning: Long positions above 1.1880 with targets at 1.1996 and 1.2090 in extension.
Technical reasons why: The pair remains on an overall uptrend and is teasing our bullish target at 1.1996 above the Ichimoku’s cloud. The RSI is above the neutrality area.
Alternative Scenario: Below 1.1880 look for further downside towards 1.1795 and 1.1665.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1795 | 1.1880 | 1.2090 |
| 1.1665 | 1.1996 |
Intraday Commodities Technical Levels
Dow Jones Intraday: consolidation in place.
Our preference: Short positions below 17755 with targets at 17380 and 17175 in extension.
Alternative scenario: Above 17755 look for further upside with 17865 and 17980 as targets.
Gold spot Intraday: further advance.
Our preference: Long positions above 1216 with targets at 1240 and 1250 in extension.
Alternative scenario: Below 1216 look for further downside with 1205 and 1197 as targets.
Crude Oil Intraday: under pressure.
Our preference: Short positions below 47.8 with targets at 44.5 and 43 in extension.
Alternative scenario: Above 47.8 look for further upside with 48.8 and 49.65 as targets.
