The plan heading into the week was to play consolidation ranges ahead of the fireworks beginning with the EUR German Constitutional Court announcement on Wednesday. It appears that the markets had a different set of drawings. Which entailed the majors strengthening against the dollar heading into the beginning of the week. The dollar weakness could be due to anticipation that the German ruling will favor ECB action or expectations for further QE from the FOMC. Either way the dollar has suffered in the short-term. Heading into Asian and European trading all eyes will be on the EURUSD sitting above trend line support at 1.2820 and USDJPY testing the last leg of support at 77.60. On top of the German court ruling GBP jobless claims are due at 8:30 GMT. Expectations are for 169K and an unemployment rate of 8%. It will be an early morning Wednesday for North American traders. As always remember to keep your trades KEANE and play it tight.
EURUSD EXPRESS TRAIN UPTOWN
The EURUSD has not looked back since popping higher last Thursday. The cross is now up around three hundred points since that point. It is hard to say what has sparked this short-term rally. It could be expectations for further easing out of the FOMC. But, gold and silver have not followed along. The rally could be due to expectations that the German high court is going to rule in favor of the ECB program. Thus ushering the possibility of Draghi’s proposed bond purchase program. Either way the pair has rallied impressively in the short-term. Support now begins at 1.2020. If the pair remains above this level a push up towards 1.0330 could be in the cards.
Keane Plan…Looking for a pullback.
GBPUSD ONE, TWO, THREE...UP WE GO
The GBPUSD pushed higher once again on Tuesday. The cross breached resistance at 1.6050. If the pair can remain above this level it may focus its eyes on the descending trend line extending from the May 2011 highs at 1.6140. This level if reached could attract sellers in the short-term. But if the 1.6140 price is pierced the upward trend could continue into the 1.63 region. Support is currently at past resistance at 1.6050 and followed by 1.5960.
Sup 1.6050 1.5960
Keane Plan….RSI is overbought…Could be overextended. Looking for a pullback to buy into.
AUDUSD BACK IN THE CONSOLIDATION ZONE
The AUDUSD managed to keep its move higher intake on Tuesday. The cross has now made up all of the ground it lost following the break below the ascending channel in late August. Support now rest at 1.0435. A break of this level could quickly finds support just below at 1.04. The pair is currently back in the consolidation zone it spent the majority of August in. Resistance is at 1.0530 and support is between 1.0440/00.
Keane Plan….Watching price action for pullbacks.
NZDUSD HITS THE ROOF
The turnaround in the NZDUSD has been swift over the last week. The pair has gained over 270 pips in this short time. The cross has now moved up to the resistance zone that has capped the pairs advance twice before between .8185 and .8220. This level will act as a Bull/Bear line in the short-term. A break above this zone opens up the path towards .8315 followed by .8470. If the NZDUSD finds resistance at this level the pair could slide back towards support at .8030.
Keane Plan… Watching the resistance zone between .8185 and .8220
USDCAD LOOKING OVER THE EDGE
The USDCAD broke lower once again on Tuesday. The pair now rest on the edge of what could amount to a much larger move lower. If the cross manages to break below the .9720 level a lot of air remains below until .94. It will be interesting to see how the cross reacts to any development following the FOMC meeting Thursday.
Sup .9720 .94
Keane Plan….Watching price action at the .9720 level.
USDJPY DROPS THE BALL
The USDJPY broke below the support zone between 78.15/00. The next level of support is below is at 77.65. A hold or break of this level will be critical for the short-term direction of the pair. A break below this level exposes the cross to the yearly lows around 76. Plus, the conversation will once again shift to possible intervention in the pair. Resistance is at past support at 78.
To Access Yen Talk, Currency Watch Video, Wake Up Call, Current Trade Setups and Private Twitter Click HERE
Non subscribers can have a 1-week free trial HERE