After some time for reflection/consolidation. the dollar is moving back to the upside – especially against those currencies which have been under the most pressure in trading today.
GBPUSD
The GBPUSD is making new lows for the day after a modest corrective move higher (see prior post - http://www.forexlive.com/blog/2014/09/02/gbpusd-trades-at-new-lows/ ). The 1.6461 level is the next major target (see chart below). This is the low level from March and also the bottom channel trend line area.
USDJPY
The USDJPY looked tired after the break and failure above the channel high on the 5 minute chart below. The correction lower was weak however – only getting close to the 38.2% of the last trend leg higher. Putting it simply, the sellers could not take control and remain nervous (see prior post http://www.forexlive.com/blog/2014/09/02/usdjpy-breaks-above-105-00-but/). The buyers remain in control.
The pair is back up testing the re-established channel trendline and high for the day at 105.20. A break above and the pair will be pushing toward the 105.435 high for the year. The invisible magnet is pulling the price toward that level.
AUDUSD
The AUDUSD testing the days low. What is telling about this pair today is how the trend lower has used the 100 bar MA on the 5 minute chart to define and limit risk (and for traders to add shorts). The sellers remain in control as long as the price stays below this moving average (blue line in the chart below). Corrections higher have been limited indicative of the trend day.
Looking at the daily chart below, a move to new lows today, opens up the downside to the lows from August at the 0.9236 level and then the 6 month lows at 0.9201, and finally the 200 day MA and 38.2% of the years trading range at the 0.9177-81 area.
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