Weekly Trading Strategies: Euro-Swiss and Dollar-Yen

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EURCHF Technical Analysis

The “Save Our Gold” has been widely rejected, inline with the latest polls that suggested the YES camp is unlikely to submit the Swiss National Bank (SNB) to its knees. A statement has been released for the SNB, expressing its comment to the EURCHF 1.2000 floor and would not hesitate to adopt new measures in order to sustain the floor. As we have elaborated in our earlier EURCHF market research we do not believe the SNB will have the ability to sustain the floor. The verbal intervention threats were not translated into real action aside negative rates on CHF holdings by Swiss banks, which did counter any attempts to re-test the SNB’s tolerance. The market has yet to open at the time of this writing but we believe EURCHF is likely to gap higher as a reaction to the referendum results and the SNB released statement. This would make a great opportunity for us to increase the short trade we are still holding in Euro-Swiss. If you have been following EURCHF you would have noticed the market is not intimated by the SNB and always corrected the “artificial” gains in the FX pair.

Verbal intervention was proven to be ineffective in the medium-term as have witnessed from the Bank of Japan (BOJ) and the Bank of England (BOE).  We do not see how the SNB differentiates from other central banks. To determine our entry for the short trade we will use EURCHF daily chart.

EURCHF Daily Chart

Please click on the chart to enlarge:

EURCHF Technical Analysus, 1 December, 2014

EURCHF Daily Chart 01/12/14

Our preferred entry will be anywhere between 1.2052 – 1.2082, depending on the opening price of Euro-Swiss. The 1.2052 resistance is supported by the 55-Daily Moving Average (DMA, in black) while the 1.2082 resistance is supported by the 200DMA (in blue). Our preferred price for the protective stop loss order will be above the 200DMA while we target a break below the 1.2000 floor. When the market opens at 22:00 GMT we will analyse the anticipated gap and release our trade alert when we find it applicable. You may subscribe to DDMarkets to be instantly notified when trading strategies are released and follow us on twitter.

USDJPY Technical Analysis

As published in our extensive market research on USDJPY, we believe current levels are ripe for executing a short trade based on the monthly chart. The fundamental trigger is likely to be the Japanese parliamentary elections that have scheduled for 14 December (Sunday), 2014. When the Forex market opens we will study Dollar-yen on multiple time frames. Should our technical models be in line with our bearish outlook for the pair we will issue a trade alert.

We are aware there are many critical events this week, starting with China Manufacturing PMI, The European Central Bank (ECB) monetary policy press conference and the US Non-Farm Payrolls (NFP). As we are using the monthly chart we are concerned these events will negate our technical projection for USDJPY.

USDJPY Trade Update

USDJPY is trading at 118.75 at the time of this writing as the FX markets opened from the weekend break. We are executing a short trade at market price, protective stop layered at 120.20, targeting 110.75. This is a medium-term trade that is based on the monthly chart as clarified in our USDJPY research that was published in November.

EURUSD Technical Analysis

In our previous EURUSD analysis we have outlined the established uptrend on the hourly chart, offering buy-on-dips strategies to be exercised.  However, the price sliced through the intraday support with a notable re-test that affirmed the success of the breakout. Rather than extending its weakness, it appears Euro-Dollar found an intraday support at 1.2429.

EURUSD 60 Minutes Chart

Please click on the chart to enlarge:

EURUSD Technical Analysis, 1 December, 2014

EURUSD 1 Hour Chart 01/12/14

We believe EURUSD is due to consolidate between 1.2429 – 1.2486 until a firm breakout is initiated by the market. Traders may be less keen on taking fresh traders as the ECB could surprise on Thursday. The support (1.2429) may be used for initiating long trades following a re-test (stop below the support)  while resistance (1.2486) may be used for executing short trades upon a successful re-test.  A breakout above the resistance or below the support would affirm the intraday trade for EURUSD.

As it is the monthly close, we will publish our medium-term trading strategies within the next 48 hours, covering the Foreign Exchange market, Commodities, Stocks and Indices.

01/12/14 UPDATE: EURCHF is trading 1.2032 at the time of this writing. We require a higher price in order to increase our short trade in EURCHF. If Euro-Swiss will trade higher before closing the gap may issue a trade alert for a short trade.

01/12/14 UPDATE II: EURUSD has re-tested the intraday support at 1.2429 and rebounded to 1.2452 at the time of this writing, inline with the trading strategy we have presented in this research.

EURUSD Current 60 Minutes Chart

Please click on the chart to enlarge:

EURUSD Following a Re-test of the Support

EURUSD 60 Minutes Chart

We will continue updating EURCHF, EURUSD and USDJPY trades at the bottom of this page.

01/12/14 UPDATE III: Moody’s credit rating agency downgraded Japan credit rating by one notch to A1, triggering heavy selling in USDJPY, ensuring our short trade is in a decent profit. USDJPY is trading at 118.24 at the time of this writing. We are closing 10% of the short trade at market price.  EURUSD is in held in a tight range as we have expected. Due to the great volatility we have notified all our subscribers regarding that we expect moderate gains in Gold at the beginning of the European session, the analysis is available on our Twitter account.  Make sure to check our streaming market news on the homepage.

02/12/14 UPDATE: USDJPY is trading at 118.43 at the time of this writing, no action is taken. We have however released a new trading strategy in gold.

03/12/14 UPDATE: USDJPY is trading at 119.18 following a strong demand for the US Dollar. As this is a monthly entry, we continue to maintain our bearish projection for the pair.

03/12/14 UPDATE II: USDJPY is trading at 119.79 at the time of this writing.  The monthly outlook has not be negated but we are uncomfortable with the recent gains in the pair. If our technical models indicate a bullish trend on the daily/weekly chart we will not hesitate to downsize the trade with a loss as a part of our risk management.

04/12/14 UPDATE: USDJPY rally in Wednesday’s session were as a result of the latest polls for the Japanese elections (to be held on 14 December 2014) that showed the LDP to have 300 sits out of 475. The 120.0 price level in Dollar-yen holds a USD 3.0 billion option, set to expire on Thursday at the NY cut (15:00 GMT). We certainly hope it  will not be persistently targeted by the market.

07/12/14 UPDATE: USDJPY triggered the protective stop loss order we have layered for the short trade. Despite liquidating 10% of the trade with a profit following Moody’s Japan downgrade a loss was incurred. Our latest trading strategies are displayed at the homepage.

Weekly Trading Strategies: Euro-Swiss and Dollar-Yen
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Weekly Trading Strategies: Euro-Swiss and Dollar-Yen

                                             Weekly Trading Strategies: Euro-Swiss and Dollar-Yen

Weekly Trading Strategies: Euro-Swiss and Dollar-Yen

Last Updated on August 9, 2015