International Trading

The USD was in consolidation/ correction mode this week ahead of the NFP. This is in a sense the market’s way of paring some overextended USD gains, but also offers a chance for the market to continue with greenback strength. There was some dollar strength immediately after the release, but when the ISM manufacturing data came out worse than expected, the market went back to dollar weakness. It appears that the USD may be turning the corner and will correct further next week.







EUR/USD – 1.29/1.2950 is Wave C Projection






eurusd






* 4H and Day: The EUR/USD pair is in a bullish mode at least in the short-term and continues to do so after the NFP.


* Even the alternate count was looking at 1.29/1.2950 as the target.


* However this is an area of strong resistance. If the market breaks above 1.2950, it is very likely that it has turned bullish.


* Otherwise, the market may may ranging. It is not longer bearish, as reflected by the strong momentum in the RSI reading rising above 70.


* The decline from 1.2900/1.2950 should not break below 1.2770, which is the end of wave I, or A. If it breaks below, then we may have the ABC count scenario, instead of the I, II, III count scenario, and the market would be bearish.


* The daily chart shows the market in a bullish mode after the RSI broke above 70 in August, but has yet successfully broken below 40. A break above 60 confirms bullish continuation in the intermediate term.


* Note that the market broke above a longer intermediate trendline, and then broke below a shorter-intermediate trendline.


* Dynamics might lead to a ranging market, which is why I anticipate resistance near the 1.29/1.2950 area, and decline to 1.28.






USD/JPY – Market Continue to Prefer JPY to USD after NFP and ISM






usdjpy






* Daily: The USD/JPY continues to be pressured. There is not much new information, except for Friday’s rejection of a rally.


* The market is seen to target 83.00 in the next week.


* There should not be consideration of bullish or ranging mode yet until the market can break close a 4H candle above 85.60.


* In fact if the market reaches that area, it may be prudent to look for topping action and bearish continuation.






GBP/USD – The Bearish Scenario






gbpusd






* 4H and Day: As anticipated in the USD/CAD posts this week, the market broke below the 1.50 level and developed a double top.


* A pattern breakout projection targets 1.0330 area (near 61.8% retracement).


* I am just not very bearish on the paid because it is ranging. In a ranging market, it may not always be prudent to anticipate swings from resistance to support.


* A conservative target is between 50 and 61.8% retracement.


* This is the equilibrium level of the range that has formed between 1.0150 and 1.0650.






AUD/USD Stalking Path to 0.94/0.95 area.


audusd






* Daily and 4H: There was a head and shoulders pattern developing a few weeks ago.


* This week invalidated that pattern.


* $he market is heading to the previous short-term high (in the daily chart) at 0.9220, then 0.94 area, which was the high in April.


* he RSI in the daily remains bullish as it stays above 40 and is breaking 60 again.


* As a matter of fact, looking at the daily, if we project wave I onto wave V, which is what the current rally is, it targets the 0.9550 area.


* In the 4H chart however, we see a bearish divergence, but the market broke an important level at 0.91, so I do not expect a strong decline.


* If there is one, I would watch for bottoming at 0.9030 area (previous short-term high in the 4H chart).


* If that breaks, we should consider the market in sideways and not bullish mode.






GBP/JPY Breaking Above Congestion Pattern






gbpjpy






* Day and 4H: The GBP/JPY is ain a decline, but is at the moment supported at 128.70, just above the May low near 127.50.


* The 4H chart shows the market in a 2-swing rally that was rejected at the 61.8% retracement level at 131.75. This completes a Gartley retracement pattern. A similar one occurred previously with the market topping at 133.50.


* The swing projections suggest a target zone between 127.50 and 127.00 area.