On Tuesday, the global financial markets had another calm day before of what should be a comparatively soft day today with many of the world’s markets having a day off. As we know, the forex world never sleeps so we may have some really hot setups in the market.

With that being said, we are going to see forex trading setups in the EUR/USD, USD/JPY and USD/CHF.

EUR/USD – Double Top Pattern In Focus

The EUR/USD pair mounted to 1.1228 on Tuesday, as the dollar extended its earlier drop amid a cautious stance ahead of Fed’s monetary policy today on Wednesday, and as EU figures resulted upbeat.

German´s May GFK Consumer Confidence Survey was unchanged at 10.4. The preliminary estimate of EU Q1 GDP published 0.4%, better than the 0.3% forecast and over the prior 0.2%.

Technical Outlook
The EUR/USD pair is consolidating below a strong resistance level of 1.1225. The direct pair has formed a series of bearish reversal candles suck as inverted hammer and doji, demonstrating a weakness in the bullish bias.



 

Back on April 24, the same level 1.1225 pushed the EUR/USD lower and the EUR/USD pair testing it again makes this an even stronger resistance. In fact, it has become a double top pattern now.

R3: 1.1256
R2: 1.1214
R1: 1.1198
Key Trading Level: 1.1172
S1: 1.1156
S2: 1.113
S3: 1.1088

On the 4 hourly charts, 78.6% Fibonacci retracement is also recommending 1.1224 level as a strong resistance. The EUR/USD pair may head towards 1.1260 and 1.1310 on the violation of 1.1225. Whereas, the support stays around 1.1170 and 1.1120 today.

USD/JPY – Oversold Pair Heading for Retracement

The market is unloading the greenback, down steadily against high-yielding and safe-haven opponents. The USD/JPY pair trades in the 111.40 price zone, up from the lowest in over two weeks. A day before, the safe-haven assets like gold and Japanese yen gained attention and triggered buying after worse than expected manufacturing PMI figures from China.

Technical Outlook

The USD/JPY failed to close last week over the 200-week MA at 111.85. This is a solid bearish sign. The drop beneath the 50-week MA at 111.25 will open the way down to the support line and 100-day MA at 110.75. Whereas, the short-term forecast will remain bearish as long as the pair’s trading below the weekly pivot at 111.77.



 

R3: 112.34
R2: 112.03
R1: 111.84
Key Trading Level: 111.72
S1: 111.53
S2: 111.41
S3: 111.1

USD/CHF – Sideways Range Remains Intact

The USD/CHF has been pushing higher since March 20, violating a significant resistance level. However, the several significant developments were back on April 18th when prices violated through Nov 13th high at 1.0128.



Today the USD/CHF prices are testing the up-trend line originated from the Dec 14 and if prices break and remain below 1.0180 then any sell-off would eye the end of the range at 1.0134. Support levels at 1.0167 – 1.0161 and 1.0148 -1.0143 should be monitored along the way.

R3: 1.0262
R2: 1.0231
R1: 1.0214
Key Trading Level: 1.02
S1: 1.0183
S2: 1.0169
S3: 1.0137

What if USD/CHF closes above 1.0215?
In this case, the bullish sentiment would lead USD/CHF prices towards 1.0302. On a road towards 1.0303, the pair may face resistance at 1.0230, 1.0255, 1.0278 first. All the best!

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