If the EURUSD started closing above 1.1730 on the daily timeframe, I might think that the downtrend was in trouble. For now, though, the bears still look firmly in control – no longs for me. Can price keep going down after it’s gone down so abruptly? Yes.
My strategy is to wait for minor retraces on the 4-hour chart and sell with renewed weakness. Nothing fancy about it. I might look at EUR-crosses like the EURJPY (more on that further down), EURNZD and EURAUD for similar moves.
The Yen had a good week last week, but more than that looks like it might be setting up for a longer-term downtrend on the USDJPY.
We saw a selloff, followed by what appears to be a consolidation/retrace, which we are still sitting in. This structure suggests more downside to come. Price might ping-pong around inside the channel for a bit – but my downside bias remains.
The UJ weekly chart shows a downward capping trendline in place since mid-2015. It’s hard to argue that this dynamic form of resistance hasn’t played a part – no guarantee that it will continue to do so, but we have seen sellers step in already.
So if the EURUSD looks like it still wants to go down, and the USDJPY looks like it wants to go down, maybe my interest in a pair like the EURJPY is self-explanatory?
The last time I mentioned the Loonie was back at point 1 I have marked on the chart. Price looked to me like it wanted to pop higher. I thought it would pop, and continue up to the 2018 highs at least. Price popped, and then collapsed – below the lows of that consolidation.
Now we’re rechallenging the early-May highs. Another pop and fail? I don’t think so. I suspect that the move lower (which also failed) triggered a whole lot of stops that are now on the “wrong” side of the market. Price can’t go up if there are still too many active sellers around and it looks to me like the last bunch of sellers at this level got filled before price reversed. I’m interested in buying bounces, off minor-retraces – also on the 4-hour chart.