Forex Trading Insights: How Dollar Weakness is Impacting Major Currency Pairs 10-9-23

Outline

I. Overview of Dollar Weakness

  • Dollar fading back to 106 support level
  • Bounced from 106 last week to show it as support
  • Currently below 100 period moving average
  • Important for price to close back above weekly open at 106.10
  • Bearish if it closes below weekly open

II. Impact on Currency Pairs

  • EUR/USD fading through prior weeks’ levels
  • Next support at 200 period moving average around 1.30056
  • GBP/USD bounced to weekly open but looking to close below
  • Pushed up to 100 period moving average
  • 200 period moving average much higher around 1.60000
  • After drop, consolidation between 1.30600 and 1.30660 likely

III. Other Dollar Pairs

  • AUD/USD bounced but below 200 period moving average
  • NZD/USD at one-month highs but could sell off swiftly from resistance
  • USD/CAD making lower highs below moving averages
  • USD/CHF consolidating above 108 support after morning call
  • USD/JPY below 100 period moving average unlike last week
  • Consolidating below 156 support level

IV. Yen Pairs

  • GBP/JPY below all longer period moving averages
  • EUR/JPY below all moving averages in flush mode
  • CAD/JPY strongest yen pair consolidating above 108
  • AUD/JPY moving averages going sideways indicating volatility
  • NZD/JPY above moving averages after fade

V. Conclusion

  • Summary of dollar weakness and impact on forex pairs
  • Moving averages, support and resistance levels to watch
  • Pending news events to watch for dollar direction

Transcript

So what we have for this week is we have the dollar continuing in the same vein that it ended last week in,which is in that weakness. And so right now we do have this dollar weakness fading back to this 106 area.

So last week if you remember, we had the dollar fade back into this 106 area before bouncing to end the week out,but not bouncing back to reclaim everything that it lost, but simply just bouncing in order to show 106 as that support area. And so 106 did show itself as that support area. Remember that was underneath that 100 period moving average.

 

And so with that, it is super important to see that as we kind of examine this idea, it’s going to be super important for us to really pay attention to this idea as it is below. And as this idea is seeking to close as far as to push up above it’s weekly open, it could potentially close below its weekly open. Again, that would be bearish for the dollar to close below its weekly open for the week only has had two days so far.

So here we have about four more minutes left before market closed as far as the opportunity to purchase does indeed close. And so we do have the price above the 100 period moving average which was the same area that acted as support last week right above this 106 area, but we also have the price below the weekly open which is at106 and ten cent. And so with that it’s going to be super important, very critical for price to make it back above the weekly open.

If Price cannot make it back above the weekly open, it is going to be bearish. And for that we are going to see the same sort of thing for our pairs. We do not have any news that is going to cause for this to snap out of, if you will, this lull that is in.

So we can either call this a lull or we can call it just simply a consolidation. So the consolidation would be anywhere from the area here as far as the 106 area up to the 100 and 650 area. So this could be just that nice area.

So again we got the drop here down to 106, we pop right back up to 100 and 650, then right back down to 106. And So it could stay range bound until Wednesday when we get official news as it pertains to the dollar and what comes next for the dollar as it pertains to the FOMC meeting minutes. We also get PPI numbers coming out on Wednesday As well as news coming out on Thursday pertaining to jobless numbers and core inflation numbers and CPInumbers as well as on Friday we have the Michigan Consumer Sentiment numbers.

And so it’s super important to pay attention to that because as we are able to pay attention to that, we are then able to rightly understand the direction that the dollar is going in. So right now the dollar is consolidating inside of the as far as in between the 106 to 150 area. So we’ll see what the dollar decides to do.

It pertains to its next move as far as where this bounce will take place and how this bounce will occur. And so with that, that’s what we have so far for the dollar. If we go and look at our individual pairs, we do see that the UC is fading through all of these prior weeks here as well.

So that is fading. The next area of support that it does indeed have is going to be that 200 period moving average,which is about that one 3005 600 area for the UCID. If that does continue to drop, we do have the Guid again bounced back up to its weekly open and it’s looking to close the day right below its weekly open.

But again, it did push up to its 100 pair moving average. Remember, it’s 200 pair moving averages all the way up here if we just want to kind of bounce it out so you can see it’s all the way up here. So again, this has been bearish for a very long time.

So after this consolidation that we have seen here, we could be potentially getting a bounce because of the fact that the Euro has dropped a lot and it has dropped very quickly and they look to actually lower their rates more quickly than the US is looking to lower our rates. So we’ll see how that continues to pan out because if that does pan out in that way, then we’ll see a bounce in the pound as far as here in coming months and potentially seeing a fade in the dollar coming in the new year. So we’ll just keep our eye out for that to see what takes place there.

Again, we got a nice bounce for the EU idea, but again, that idea is still below its weekly open as well as below both of its longer term period moving averages, that 200 and that 100 period moving average. And then we have very nice bounces in the Au and NU. So with that this one is up, so Au is up in the same way that AJ is up on the week.

So up on the week, but still below as 200 period moving average. And then we have NU which is also up for the week, but for NU being up for the week, it is going to highs that it has not seen in about a month’s time. So it’s been about a month’s time since the last time that these highs were seen.

The last time that it saw these highs up here, it did sell off very swiftly. So we could potentially see that same sort of amove once this idea does indeed break down but right now this idea is moving up. So you can definitely capitalize on that, taking it back to these areas of resistance that it has.

To the top, we have the GJ ideal which is below all of its longer period moving averages as well as having both of those moving averages going sideways. So the 200 is going sideways, the 100 is going sideways. With that, we do know that there is increased and enhanced volatility that can take place whenever you have both of those long term moving averages going immediately sideways.

And so that’s what we see there. We do have for the EJ idea, again below all of its moving averages. So again, this is complete and absolute flush mode, but it has been consolidating a little bit here.

But again coming back down to this 156 area, we’ll look and see if that area does indeed hold or if that area does break down. For the UJ idea, it is now below its 100 period moving average. Last week it dipped below its 100 period moving average and then immediately bounced back above it.

And so we’ll look to see if that same sort of a capitalization can happen for this week. But again, overall it is making lower highs. So again it did get a nice bounce here as far as the close out last week, but again making lower highs.

Remember, for the dollar, the dollar actually sold off towards the end of last week. So with the UJ idea bouncing,we’re now seeing that weakness as far as that was not being shown for the individuals that bought into close of last week, those individuals have now sold off those positions, which is why not only from last week’s close, but alsofrom this week’s start, both of those are indeed down. We have the CJ idea which is again consolidating.

We talked about this earlier, that the CJ idea is the strongest idea for our yen pairs, it is the strongest idea for our yen pairs. And so that’s what we are seeing here, which is also why we saw with the UC idea, that is exactly why we saw the weakening of this UC idea as far as this fade there, because the Canadian dollar is the strongest one of our yen pairs. And so we again had a very nice consolidation here that we talked about this morning on the morning meeting call right here above 108.

And so we’ll continue to see if that area can hold and continue to push up. It does have its 200 period moving average which is now going immediately sideways. So again you can get some very good volatility from this trade idea as far as to the upside and then coming back down to the downside.

The last area, as far as the last porter area that it captured and lost, that it had and lost was that 110 area. So we’ll belooking to see if it can recapture that 110 area. And then we have the AJ idea again with pretty much all of its moving averages going immediately sideways.

So you got the 100 going sideways, you got the 200 going sideways, you have the 20 slightly curling up, you have the 50 going sideways as well. So with all of those, you have all of those going immediately sideways. And then you’re looking to see if this idea can pop back up, at least to open, to see if after making it to open, it can continue to push up from there.

We have for the NJ idea, we have this one down below as far as down below open for the majority of the day. Now that the day is getting ready to close, we do have this one pop up above for the day, so we’ll see if this one does decide to fade as far as this pop that it’s currently having. And so we’ll keep our eye out on that one, as this one is currently above all of its moving averages right now, this trade idea.

So we’ll continue to update you guys on all of these ideas and on the ideas that are actionable as well as the ideas that do have news.

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