Technical setups for the week ahead – September 17, 2017

Having spent some time on the market fundamentals lately, I have not forgotten about those technical chart setups. Here is what I expect to be the key pairs to monitor for next week’s chart setups.

EURUSD:

 

eurusd1
EURUSD 1-Day

This pair would’ve made a killer trade about a month or two ago. I remember consistently scaling into this trade as it broke above a key daily level. It’s too early to jump the gun and say this rally is over, but I think we can definitely observe signs of a “slow down”.

Looking at the two most recent highs, we’re not seeing a nice rally. It’ll make a high in one week and then it will come right back down the next. As of the moment, I’m honestly not a big fan of trying to trade this pair even though I do think it’s interesting to note the swing trading advantages with this pair. I may end up taking some trades on the lower timeframe if opportunity presents itself. For now, this pair remains a worthy monitor as it’ll be interesting to see how the euro will stack up against the Federal rate hike optimism.

GBPUSD:

gbpusd1
GBPUSD 1-Week

This week’s rally is certainly not thanks to Brexit. However, the bullish move should not have been unexpected since we did expect the MPC minutes to deliver a more hawkish tone regarding the monetary policy stance. This is due to the fact that August’s inflation figure came out to a 2.9%. To give you a sense of this significance, here is a look at the historical inflation figures.

uk inflation
UK Inflation

The last time we hit the 2.9% high was in May, 2017, but before this would be sometime back in 2013. Inflation has never been as significant till now.

Although I didn’t get long the GBPUSD pair, I did short EURGBP as it generated a better signal. However, I would be watching this pair more for the week ahead as I would want to get long if it does make a retracement.

gbpusd2
GBPUSD 4-Hour

Pardon my horrible drawing, but essentially I am looking for a pull back to either the 1.344~ daily level or the 1.338~ moving average level as the 20-period EMA has reliably acted as a dynamic S/R tool.

USDJPY:

usdjpy1
USDJPY 1-Day

Last Thursday’s Reuters article makes for an interesting read, I suggest visiting that first.

North Korea threatens to ‘sink’ Japan, reduce U.S. to ‘ashes and darkness’

Safe haven currencies such as the yen or the franc should be bought up including gold, but it certainly doesn’t look that way. In my earlier post, I pondered the possibility of whether or not the markets could be de-sensitized to North Korea’s missile testing. Another consideration is that the Federal rate hike is back in the spotlight and the US dollar is being bought up in anticipation of a more hawkish tone.

Taking a look at the technical setups, I think it will remain highly likely to see this pair break above this daily level and trend higher. This is given the fact that this pair has been stalling longer than expected at this resistance zone signalling that it could have become insignificant. I would like to wait until Sunday’s open before making an entry decision on this pair.

EURJPY:

eurjpy1
EURJPY 1-Day

Finally, I am eyeing another bearish yen. This time it is against the euro. As of the moment, it appears this breakout above the daily high level is holding up so this resistance could potentially become a support level. Nevertheless, I would also like to wait until Sunday’s open to see if the yen will indeed have a bearish outlook for the week ahead.

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