US dollar strength prevents FOMC entry, lower EUR / USD and higher USD / JPY

The popularity of Greenback seems to be growing day by day. Over the past ten trading days, the U.S. dollar has steadily strengthened against its leading counterparts. Today, the USD / JPY has posted a rather impressive day and is currently pushing the high of 2 September. See the following table:

USD / JPY napi diagram

In the last 12 trading days, this pair has already won more than 400 pipettes. What we see here is the formation of higher and higher lows – characteristics of an upward trend. While we can’t say the pair is on an uptrend yet, we can’t deny the strong rebound we’ve seen in the exchange rate recently. The 200-day moving average is only about 360 feet high and has a high resistance level around 107,494, which is just over 300 cores. If the pair continues to trade and manages to conquer these levels, an upward trend could very well come into play.

Currently, the strong bullish movement of the USD / JPY has been quite prolonged, and if you want to enter long positions in this pair, it might be wise to wait until a pullback appears first. Pursuing such strong movements is often an easy way to lose money. Entering trades when resetting the price allows you to use tighter stops and can reach larger destinations more easily. Take a look at these examples on a 4-hour chart:


I like the determined sale we’ve seen on this pair in the last few days since it broke through the 200-day moving average. Over the past few weeks, the EUR / USD exchange rate has been jerky and out of control. The pair appears to be able to trade slightly lower in the coming days, especially if we keep track of the momentum of the current US dollar momentum. Currently, the pair is quite oversold, and if we look at the large distance between the 20-EMA and the current market price, this confirms the oversold condition of this pair. Under normal circumstances, it’s better to wait for some sort of retracement to happen, even over a large time frame, than a daily chart. Let’s look at the daily chart of EUR / USD:

EUR / USD daily chart

The couple broke through the bottom of this triangle today and the low level of the Brexit candle could be the next level of support. I think we can get a retracement in the next day or two that can offer a good setting to shorten the pair. While we may not be able to get 20-EMA back on a daily graph soon, there should be multiple retracements to moving averages on smaller graphs. This gives us the opportunity to find more trades, as tracing back to 20 charts a day doesn’t always happen, but it happens often every hour. Traders can also trade with smaller stop losses in terms of stop distance. Let’s look at the EUR / USD hourly chart:

EUR / USD hourly chart

Here you can see that the 20-EMA has recently shown great resistance to price, and if you look at the two red circles on the chart, it is clear that these entries were made on or slightly below the 20-EMA (trader with confirmatory type strategies). traders) were high quality entries. We may soon have the same opportunities to trade by undoing the hourly chart. I’d still prefer to see some kind of retracement on the daily chart before I start looking for new opportunities on smaller time frames, like a clock chart.


The price is still supported by the 20-day exponential moving average and is still clear of the 200-day moving average. My bias with this couple is still bullish and I try to buy dips. Here is a daily chart of the couple:

USD / CAD hourly chart

Here you can see that in this chart, the exponential moving averages are reconciling again, indicating that some decent bullish momentum has returned to the market. The retraction of any of the exponential moving averages can be traded, depending on the shape of the candlesticks formed on the retracement. Let’s not forget that it helps a lot if the exponential moving averages are aligned, as this confirms that they are trading in the direction of widespread market momentum.

Tomorrow’s economic calendar

Tomorrow is a very easy day for economic data. The most important event is probably the U.S. crude oil stocks at 3 p.m. This could have an impact on the USD / CAD as the Canadian dollar is highly correlated with crude oil prices.

We wish you a great trading day!