Markets Remain Range-Bound Amid Mixed US & China Fundamentals (2nd – 7th Dec 2019)
No major fundamental catalyst dominated this past week’s market activity, as prices remained range-bound in most major currency pairs, likely due, in-part to mixed fundamental data.
The USD temporally gained over claims that a phone call took place between participants in the negotiation, and it yielded positive progress as regards phase one of the deal.
However, negative consumer confidence numbers published on Tuesday tempered this for the USD. This week, we will continue to trade the major manipulation points found at range extremes until a short-term trend begins to develop.
Eur/usd
Analysis: This Pair moved sideways for the vast majority of last week, staying mostly within a range. To begin the week, we will be trading levels to both sides of the price.
With that said, Friday did produce a beautiful stop run reversal of the previous lows (I have a video on the entry I’ll link to here once posted), followed by a full ADR length push up.
Normally, this would give us a valid first push up but the lack of manipulation points to choose from as well as the overall longer-term bias down is why I’m still keeping the bias open.
Should today provide a 2nd market cycle up, I will look for a third push the following day.
Manipulation Points: Upper – 1.0300 & 1.1050 Lower – 1.0982
Gbp/usd
Analysis: The last two trading days had two consecutive days without a valid market cycle. This automatically places an open bias on this pair to start the week.
Manipulation Points: Upper – 1.2974 Lower – 1.2884 & 1.2822
nzd/usd
Analysis: The Kiwi continues to hold within a very tight 40 pip range. As a result, we will keep an open bias and trade the manipulation points on both side of the price. Long from any stop run of a lower level and short from any stop run and confirmation of an upper level.
Manipulation Points: Upper – 0.6436 & 0.6466 Lower – 0.6396 & 0.6359
gbp/jpy
Analysis: Like many other pairs, the GBP/JPY had two consecutive days of sideways price action. As a result, we revert to an open bias and look to trade manipulation points to both sides of the price.
Manipulation Points: Upper – 141.81 Lower – 141.16 & 140.76
USD/jpy
Analysis: All yen is in an interesting position to start the week. It started the week with a major rally on the back of broad risk appetite, but ended the week bearish after creating a failed test of the highs that looks more like a stop run.
For me the 109.36 level is quite important as a Bullish ‘line in the sand’ as it is the last clear support we have. This tends to compress liquidity and thus it becomes a prime stop run location.
Therefore, I’d be happy to take a stop run long from the lows but should the level break, a backside trade setup to go short would also be valid.
Manipulation Points: Upper – 109.67 Lower – 109.36
eur/jpy
Analysis: Two days of sideways price action equals an open bias. We are trading levels to both sides of the price on this pair.
Like the USD/JPY, this pair also ended the week on a failed break and reversal back below previous major resistance around the 120.65-70 area. Should be begin to break the 120.35 area and hold on a backside test, further downside would become likely IMO.
Manipulation Points: Upper – 120.75 Lower – 120.35 & 119.63
usd/cad
Analysis: An argument can be made for a valid 1st to the downside, but the market is also moving in a very clear range. As a result of the conflicting signals, I would leave the bias open on this pair but be slightly aggressive with upper levels.
Manipulation Points: Upper – 1.3292 & 1.3324 Lower – 1.3263 & 1.3203
Important Disclaimer: At Day Trading Forex Live (DTFL), we have specific entry, exit, and trade management rules that are used for trading these levels. You should not blindly enter the levels without first doing your own research and ensuring you have a trading plan in place.
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Happy Trading
Sterling