FX & Stock index levels to watch prior to Christmas

Last week: There were three 4hr-chart TC signals that triggered early last week but these basically traded sideways until FOMC. Two further 4hr TC signals triggered after FOMC on the EUR/USD and NZD/USD and these are still open and have given 120 and 150 pips respectively. I note that quite a few 30 min chart TC signals triggered on Friday but, yet again, these were during my night.

Next week:

NB: This is just a brief update given the Christmas and the New Year period.

US$: remains on the march up from 100 but has stalled at the 103 whole-number level. A review of the FX Indices can be found through this link.

NZD/USD: the NZD/USD closed the week below the key 0.70 level marking a significant trend-line breakdown.

EUR/USD: this, too, has closed below a major S/R level at 1.045 BUT only just below.

Forex vs Stocks: I continue to note the decidedly ‘risk on’ trade happening with Stocks versus the ‘risk off’ style of trade going on with Forex and wonder whether one will eventually join the other. However, given that the 25-year chart below shows that there are more years where the US$ and S&P500 align than diverge, then I wonder why I’m waiting at all.

TC 30 min chart signals: I have been considering 30 min chart signals, as well as 4 hr signals, since my October trading trip but I still find these tend to trigger more so during the US and European sessions. Friday was yet another example of this with 30 min chart LONG signals triggered on the EUR/NZD, EUR/AUD, GBP/AUD and USDCNH. The GBB/NZD gave a decent move but didn’t trigger any TC LONG signal:

EUR/NZD 30 min: 130 pips

EUR/AUD 30 min: 140 pips

GBP/AUD 30 min: 230 pips

USDCNH 30 min: 150 pips. This follows on from the 4hr chart I posted via Twitter suggesting traders watch for any momentum based triangle breakout:

GBP/NZD 30 min: no TC signal here but it also gave a decent move:

Calendar items to take note of:

Stocks:

FTSE: this is currently trading above 7,000 and any monthly candle close above this level would support a bullish ascending triangle breakout, similar to those already seen on the S&P500, DJIA and Russell 2000, and this has a target of 10,400:

FTSE

S&P500

DJIA

Russell 2000

QQQ: there has been a daily close above the 120 level but traders need to watch for any monthly close above this key level as this would support a bullish ascending triangle breakout here too:

Forex:

EUR/USD: this pair has closed the week below the major S/R level of 1.045 being the LOW of the last two years (2015 & 2016). The weekly chart shows this price action as forming up into a rather mean looking Bear Flag so I’ll be watching for any continuation move from this key region. Parity would seem to be the next main target if bearish sentiment continues.

There is only German Ifo Business Climate data for the EUR next week but watch with the BoJ Interest rate update too for any impact to flow to the US$.

There is an open 4hr chart TC SHORT signal here that has already given 120 pips.

EUR/JPY weekly: I still think this might be drawn to the 61.8% fib up near previous S/R at 134.50. Watch with next week’s BoJ Interest rate update:

AUD/USD: this pair looks heavy again following FOMC and closed below the psychological 0.74 level and also below recent support from 0.731. There is still the major S/R level of 0.72 below current price action though.

As per Friday’s post I’m now watching:

the long-term S/R and 61.8% fib of the 2001-2011 swing high: near 0.72.
the 61.8% fib of the 2008-2011 swing high: near 0.71.
the weekly chart’s triangle support trend line: near 0.70.

Next Tuesday brings the RBA’s Monetary Policy Meeting Minutes and MYEFO but watch, too, with the BoJ Interest rate update too for any impact to flow to the US$.

AUD/JPY: this has almost made it to the 89 level and I’ll be watching to see how price action responds from here. Any continued pull back with stocks could take this pair lower too.

Next Tuesday brings the RBA’s Monetary Policy Meeting Minutes and MYEFO but watch, too, with the BoJ Interest rate update.

NZD/USD: This pair has suffered with US$ strength following FOMC and has broken below the major 0.70 S/R level and also below a 14-month support trend line. The weekly chart shows a rather mean Bear Flag and bearish H&S so I’ll be watching to see if price holds below 0.70 to support these two patterns.

There is NZD GDT Price Index and GBP data next week but Next Tuesday brings the RBA’s Monetary Policy Meeting Minutes and MYEFO but watch, too, with the BoJ Interest rate update too for any impact to flow to the US$.

There is an open 4hr chart SHORT TC signal here:

GBP/USD: I wrote an article on Friday outlining what I’m looking for with this pair so please refer to that post for detail but, essentially, I’m on the lookout for any continuation of the Lower low and Lower high pattern OR for the print of a new Higher low or Higher high to signal a possible trend change.

Of all of the GBP, EUR, AUD and NZD currencies, the GBP probably suffered the least against the US$. The Cable printed a bearish coloured Spinning Top candle, which was slightly smaller than that printed on the EUR/USD and smaller than the bearish candles printed on the Aussie and Kiwi. Whilst this price action may seem rather odd given Brexit it may be as much due to some fatigue with the long bearish run that has been in play on the GBP/USD. Thus, some relief type of bounce may evolve for the Cable even if only temporary.

The only GBP data for next week is Current Account data but watch for USD-sensitive data too, including the BoJ rate update.

USD/JPY: I’m watching for any continuation up to the 124 level on the U/J to support a monthly-chart bullish ‘Inverse H&S’:

USD/CAD monthly: I’m watching for any momentum-based triangle breakout on this monthly time frame.

Next week brings CAD CPI, Retail Sales and GDP data but watch for all of the USD-sensitive data too.

EUR/GBP weekly: I’m still watching for the 61.8% fib to be targeted here:

GBP/AUD monthly: The November candle had formed up a bullish-reversal Railway Track pattern here. The December candle is only small but is bullish for now and I’m keeping an eye on the S/R levels of 1.75 and 1.70:

GBP/NZD monthly: As with the GBP/AUD, the November candle formed up a bullish-reversal Railway Track pattern here too. The December candle is only small but is bullish for now and I’m keeping an eye on the S/R levels of 1.77.

GBP/JPY monthly: this is back near a long-term S/R region at 147 and this was also a previous 61.8% fib. I’m watching to see how it makes or breaks from here:

AUD/NZD monthly: watching for any momentum-based triangle breakout here too:

Gold: I’m watching for any make or break of the 78.6% fib near $1,115 and, if that gives way, then for any test of the 100% fib near $1,050: