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Forex Analyst Picks & Strategies

Tyler Yell, CMT RSS Twitter

Forex Trading Instructor
Tyler Yell, CMT

August 31, 2015 My Picks: Bullish EURUSD Toward Weekly S2 Above 1.1130
Expertise: Intermarket Analysis, Sentiment, General Technical Analysis, Elliott Wave
Average Time Frame of Trades: 1-3 Weeks

Bias: Bullish EURUSD Toward Weekly S2

Point to Establish Long Exposure: Close Above 1.1306

Target 1: 115.50 weekly S1 Pivot

Target 2: 118.20 61.8% Toward Double Bottom Target

Invalidation Level: 1.1130 Internal Level (Elliott Wave Based)

Last Week’s Price Action Recap:

Does your neck hurt? If so, it may be whiplash from watching EURUSD last week. DailyFx on Demand provides audible access to bank insurance and even Top-Tier institutions were awe-struck by the move. Many in DailyFX, including yours truly, were looking to 1.1430/60 as firm resistance. On Last week’s amazing volatility, where EURUSD posted its highest volume day of 2015, rsistance was cut like a hot knife through butter as confusion and price discovery were widespread.

Technical Focus:

Bullish EURUSD Toward Weekly S2

The channel of Andrew’s Pitchfork may help to provide a bit of a roadmap to the twists and turns. Internal pivots (black trendlines within the pitchfork) have shown to support and resist price action. We’re sitting on an internal level of support now and if that doesn’t hold, we could see a test of the lower bound structural support at 1.1017/21 and the Weekly S1 Pivot at 1.0985. The confusion is similar to USDJPY when it becomes trapped in sideways price action like we’ve seen many times over the past 3 years. However, a study of correlations show that EURUSD & USDJPY show the tightest correlation in 8 years, which could mean that they’re starting to mirror each other in behavior. If that’s the case, we could be seeing a sideways move that would favor playing the range and staying away from breakouts that can act as price traps.

Other EUR/USD Levels to Note:

2nd resistance: 1.1485 233-DMA

1st resistance: 1.1364 Aug. 27 high

Spot: 1.1206

1st support: 1.1147 21-DMA

2nd support: 1.1106 55-DMA


Bullish EURUSD Toward Weekly S2

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.50 as 40% of traders are long. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the EURUSD may continue higher.

Kristian Kerr RSS Twitter

Sr. Currency Strategist
Kristian Kerr

August 27, 2015 My Picks: Looking to sell USD/JPY on strength
Expertise: Technicals
Average Time Frame of Trades: A few days to a few weeks

USD/JPY and most other ‘risk markets’ seem to be coming up on an important near-term juncture in both price & time. If Monday’s meltdown under the 161.8% projection of the June – July decline in the exchange rate was indeed some sort of important low then we should find out in the next week or so of trading. Looking at the cyclical picture, the ideal time to see near-term downside forces try to re-assert themselves is around the early part of next week. Immediate attention pricewise looks be on 125.65/80 (and with good reason as there is a lot of stuff there including the 200-day moving average and the July closing low), but if USD/JPY does have a little more upside left then it will be hard to see this zone holding up so we can’t rule out a push to Gann resistance at 121.45 or even 122.55. Assuming USD/JPY does peter out then this is where things will get interesting as it should lead to some sort of retest into a more important cyclical pivot around the end of next week/start of the week of September 7th. A couple of things to be on the lookout for is if USD/JPY doesn’t stall out by the middle of next week as this would argue a low is already firmly in place and that a meaningful retest is unlikely. Similarly only a modest 1-2 day pullback early next week followed by a quick break back through the anticipated high would also severely undermine retest chances. We will revisit how things are shaping up heading into the more important turn window if spot exhibits the weakness that we are expecting.

Looking to sell USD/JPY between 121.50 and 122.50 early next week. Traction over the latter forces re-think.

Stop profit hit in EUR/USD short.

Walker England RSS Twitter

Forex Trading Instructor
Walker England

August 27, 2015 My Picks: Short USDJPY
Expertise: Technical Analysis
Average Time Frame of Trades: 1 Day-1 Week

Market Condition: Retracement

Target 1: 100% of Daily ATR

Target 2: 200% of Daily ATR

Invalidation: Bullish Breakout

USDJPY 1Day Chart

USDJPY Retraces to Resistance

(Created using Trading View Charts)

The USDJPY has continued to break down through key values of support from last week’s Inside Bar trading pattern. This includes dropping as much as 433 pips, below the July 2015 low at 120.41, to a low of 116.08. From this low price has retraced back to previous support, which is now acting as new resistance. If prices remain under 120.41, this can provide traders to sell with the markets prevailing direction on a retracement. Initial targets may be set using 1x current ATR, which today sits at 130 pips.

Alternatively, if prices rally through resistance, this raises the possibility that the USDJPY is setting up for a broader retracement against this month’s previous decline. This would tentatively delay the execution of any new sell based positioning.

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Jeremy Wagner RSS Twitter

Head Forex Trading Instructor
Jeremy Wagner

August 25, 2015 My Picks: Long EUR/USD
Expertise: Elliott Wave, Technical Analysis
Average Time Frame of Trades: 2 Days to 2 Weeks

Yesterday’s pivot high in the EUR/USD occurred at a strong confluence of wave relationships. When analyzing through the glass of Elliott Wave Theory, it appears the move higher is incomplete. Therefore, we look to identify key levels of support which would generate positive risk to reward ratios.

Bullish in the 1.1350-1.1450 zone.

Stop loss no greater than 100 pips.

Target the 1.17-1.18 zone.

Yesterday, we identified 1.1450 as the top of a price zone that would be an interesting price juncture for a bullish pivot. It represents the former breakout zone above the May 15 high and the June 18 high, plus it includes wave measurements as well.

(Click here to view the EURUSD chart with Elliott Wave labels identified.)

We think the current sell off represents a small wave ‘iv’ and therefore, prices should comfortably remain above Aug 12 high of 1.1215. Bleeding down below 1.1450 is ok with this wave picture and the discomfort in analysis wouldn’t begin until we test 1.1350. Therefore, look for a meaningful pivot in the 1.1350-1.1450 price zone.

Targets lie in the 1.17-1.18 handle depending on where wave ‘iv’ terminates. Therefore, look for bullish candle reversal patterns or positive divergence in an oscillator to suggest a bottom is forming and we’ll want a stop loss no greater than 100 pips. This should yield a better than 1:2 risk to reward ratio.

EURUSD Retests 1.1450 Breakout Level

The EURUSD SSI reading has been interesting over the past 48 hours of trading. We saw the SSI figure crater to -3 and soften a bit to -2.6 as prices jumped higher yesterday. As the EURUSD has continued to fall, SSI has moved to the current reading of -2.1.

If the SSI begins to shift towards more sellers, then that could also indicate a near term bottom is close at hand.

On a side note, if we do see EURUSD bump higher and retest the highs, then that likely coincides with another sell off in US stocks. Here are some levels I’m watching in the S&P500.

Jamie Saettele, CMT RSS Twitter

Sr. Technical Strategist
Jamie Saettele, CMT

August 14, 2015 My Picks: Range Trading EURUSD
Expertise: Technical
Average Time Frame of Trades: Several days+

We've been tracking the near term picture closely in USDOLLAR (equal parts EUR, GBP, AUD, and JPY) in order to help us trade EURUSD this week. The following comments were published to SB Trade Desk this week and should give you an idea of how we've navigated the recent chop.

8/11: The Chinese revaluation killed commodity currencies (AUD in particular) but sent a number of Europe / commodity crosses into upper parallels (support for AUD and NZD). Gold broke near term resistance. The DXY (ICE USD Index) experienced resistance at old support and has declined in 5 waves from last week’s high. In other words, the market is still setup for a bigger turn in the USD. Ironically, the Chinese revaluation may end up contributing to the clean up of the recent technical mess in the USD and elsewhere.

8/12: The general theme presented during the webinar today was that the USD could bounce here but if the trend has turned down (at least for a few more days) then we’ve got levels in mind that should provide resistance. Here are the best (cleanest) USD levels from my vantage point.

For EURUSD, the zone for support if the move is still higher is 1.1088-1.1113. This zone is marked by recent highs and slope lines. The top of the zone could be support during early European hours. There is a confluence for the bottom of the zone during early US hours.

In summary, the dip on 8/13 got us long EURUSD but we're willing to flip to the short side on signs of USDOLLAR support over the next few weeks. For more analysis and trade setups, visit SB Trade Desk.

Ilya Spivak RSS Twitter

Currency Strategist
Ilya Spivak

July 31, 2015 My Picks: Long USDCAD at 1.2649
Expertise: Global Macro
Average Time Frame of Trades: 1-6 months

I bought USDCAD at 1.2649 and have since booked profit on half of the position. The rest of the trade will remain open to take advantage of any further gains ahead. The stop-loss has been moved to the breakeven level.

Near-term resistance is at 1.3002, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 23.6% level at 1.3090. Alternatively, a reversal below the 23.6% Fib retracement at 1.2872 clears the way for a test of the 38.2% threshold at 1.2729.

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David Rodriguez RSS Twitter

Quantitative Strategist
David Rodriguez

July 15, 2015 My Picks: Sell gold on close below 1150
Expertise: System Trading
Average Time Frame of Trades: 2-10 Weeks

Gold is testing a key trendline as it's remained in 'neutral' territory for its longest stretch since 2010. A breakdown targets a much larger decline and a resumption in the multi-year downtrend. I like getting short on a daily close below $1150 with initial targets at March, 2010 lows of $1040. Max risk on the position would be a daily close back above key trendline support at $1150.

Comment and view the chart live update here at this link:

John Kicklighter RSS Twitter

Chief Currency Strategist
John Kicklighter

June 23, 2015 My Picks: Pending: EURUSD, EURJPY, GBPUSD, USDJPY, NZDJPY
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 1 Day to 1 Week

Looking across the Dollar, Euro and Yen majors; there are plenty of pairs that look well positioned from a technical perspective. Yet, once again the fundamentals may act as a barrier for follow through. With uncertainty or the focus pushed forward, expectations could pump the break on what looks like otherwise clean technical setups.

For the Euro setups, there are good looking setups; but resolution on Greece - for better or worse - is necessary. EURUSD in particular is in a diminishing wedge below 1.1500, but needs a decisive outcome from the debt standoff to have a fighting chance for follow through. A clear fundamental outcome would be good for either direction, but I prefer a scenario where the deal falls through and it clear 1.1250. The same is true of EURJPY, which could easily clear 138 congestion floor if a Greek crisis proved contagious.

For a Euro long view scenario, one of the better positioned pairs is EURCAD which puts a listless Canadian Dollar against a theoretically motivated counterpart. Clearing a 16-month channel resistance around 1.40 would be the key technical move, but fundamentals are crucial here.

For the Yen crosses, a clear risk view is necessary and we are as lacking of conviction there as anywhere else. A USDJPY move towards 125 on a clear risk appetite drive could be an opportunity but it has a narrow window and dubious support. I'd prefer seeing risk aversion pull down equities and the Yen crosses. USDJPY below 122.50, 121.50 and then 120 are the key stages. I am also partial to NZDJPY given it broke a major neckline on a six-year rise and head-and-shoulder pattern. A staging from a retest at 85.50 or projection below 84 may prove viable levels to work with.

From the Dollar crosses, focus on rate forecasts is still strong but the wait-and-see mentality is not as magnetized to the future as it was last week leading into the FOMC decision. That may ease trend development on pairs that aren't 'distracted' by upcoming event risk. I'm watching GBPUSD as it turns from its 50% Fib of the July 2014 to April 2015 bear phase around 1.5900. Without something to hold it back, perhaps this pair finds follow through more readily.

GBPUSD Turns at Big 50% Fib

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Currency Central Bank Rate
Symbol Roll S Roll B
EUR/USD 0.09 -0.2
USD/JPY -0.11 0.03
GBP/USD -0.12 0.05
USD/CHF -0.42 0.18
EUR/CHF -0.29 0.1
AUD/USD -0.5 0.23
USD/CAD 0.02 -0.09
NZD/USD -0.67 0.3
EUR/GBP 0.12 -0.28
EUR/JPY 0.04 -0.1
GBP/JPY -0.28 0.12
CHF/JPY 0.15 -0.37
Rates shown are the expected rolls in USD for holding one 10k lot today on a typical FXCM Standard account.