Where next for the USD, EUR and JPY ?

USD, JPY,EUR - daily charts
USD, JPY,EUR – daily charts

At the start of another trading week is perhaps a good time to take a look at the principle currency indices, and in particular those for the US dollar, the Japanese yen and the euro, and all based on the daily chart.

If we start with the US dollar index to the left, last week’s reversal was well signaled with Monday’s candle delivering a shooting star following the recent rally, and failing once again at the 12,150 region which is now developing into a significant area of price resistance. This duly resulted in US dollar weakness, with three consecutive down days, before Friday’s hammer candle signaled buying in the 11950 region. The buying signal has been validated in today’s trading session, with the index moving higher once again and through the 12,000 level to currently trade at 12,006 at the time of writing. Last week’s bearish price action failed to test the deep platform of support now in place in the 11,900 area, and with the resistance area overhead also well established, any longer term breakout will need to breach one of these levels. In the short term the dollar index now looks set to consolidate between these price levels and continue the price action of March and early April. The longer term direction for the USD is now dependent on the FOMC along with some solid economic data in to underpin any consequent rise in interest rates. However, given the recent run of soft numbers any increase in June is now looking increasingly unlikely.

Moving to the euro index at the top right, the recent bearish momentum for the single currency has reached a temporary pause point in the 116.50 region, with last week’s price action building a strong platform of price support. In early trading the index has climbed marginally higher to test the 118 price level, but with a deep area of price congestion ahead between 118.50 and extending to the 121 area, any move through here will need to be well supported for any sustained recovery for the euro against its principle counter party currencies.

Finally to the JPY index on the bottom right, and here the currency continues to remain range bound with the floor of support now extremely well defined in the 6800 region, and with the ceiling of resistance building in the 7150 area. For longer term yen traders, patience is the key, and as has happened in the past with such extended phases of price congestion, once any breakout occurs, the associated trend is likely to be in place for some time.

By Anna Coulling

Charts are from NinjaTrader and the trading indicators from Quantum Trading.

About Anna 1054 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

2 Comments on Where next for the USD, EUR and JPY ?

  1. Hi Anna

    Awhile back you mentioned that you were working on a chart book, I was wondering if you have a date plan for the release of that book.



    • HI Sebastien – many thanks for getting in touch and yes this is most definitely in the plan for this year. I am currently writing two books of which this is one, and it will be a volume price analysis workbook with examples across all markets. The other book is an introduction to trading and will explain the key principles of getting started as a trader/investor. In terms of a publication date, this will be in Q3/Q4 later this year. Thanks once again and all best wishes – Anna

Leave a Reply

Your email address will not be published.