EUR/USD: 1.2869
Very Short-Term Trend: Weak downtrend
Outlook: On Friday EUR broke above the declining trendline from the mid-September top and I considered that a bullish sing. However, the market pulled back and negated this breakout. This morning EUR made a new low at 1.2803 but recovered strongly from there.
The trading has been quite difficult and frustrating here, but the decline from the mid-Septenber top remains corrective and that tells me that at some point the single currency should start a new strong leg up. But the market needs to break the series of lower highs and lower lows to indicate the next leg up is indeed under way. That means we need a move abv 1.2960/70. The problem is that once EUR is there, it will be difficult to find a low-risk entry point. That's why I prefer to attempt one more long position today.
Strategy: Longs favored at market (1.2871). Stop=1.2810
GBP/USD: 1.6146
Very Short-Term Trend: Sideways
Outlook: The market fell sharply on Friday but found support near the 1.6114 Fibonacci level. Right now there are some weak buy signals from hourly oscillators and under the sideways trend definition, that usually means one can favor the long side.
The only problem is how to determine the key level on the downside that negates the current sideways consolidation pattern. There is no such level in my view. So, trading is a bit difficult here. If USD is to decline, I think better opportunities can be found now in EUR/USD market.
Strategy: Stand aside.
USD/JPY: 77.91
Very Short-Term Trend: Uptrend
Outlook: With Friday's move higher, a small uptrend has established on the hourly chart ot USD/JPY. The question now is if this upmove to be trusted. Recently this market has been quite boring and many of the buy and sell signals haven't worked out simply because this market has refused to follow through. It may happen again, but with the hourly chart in uptrend, I think one can now favor the long side.
Strategy: Longs favored at market (77.93). Stop=77.57
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