Forex Trading Insights: Trading a Range-Bound Dollar 12-13-23

Dollar Price Action and Moving Averages

  • Dollar range bound after CPI release
  • Sideways 200MA and 100MA indicate volatile price action
  • Prices bouncing between 100.350 support and 100.425 resistance
  • Awaiting PPI numbers and potential dollar impact

Dollar Impact on Major Currency Pairs

  • EUR/USD holding 200MA support and 108 resistance area
  • AUD/USD below moving averages but making higher lows
  • GBP/USD reclaimed weekly open below MAs
  • USD/CAD bounced off 100MA and 200MA support

Yen Pairs Retrace After Bounces

  • GBP/JPY, EUR/JPY below moving averages but holding weekly open
  • USD/JPY holding 105 major quarter support
  • CAD/JPY, AUD/JPY 100% retraced weekly bounces

Market Drivers to Watch

  • PPI numbers release tomorrow 8:30am ET
  • Potential impact on dollar and dollar pairs
  • Interest rate decision today – consensus expects 5.5 hold

Key Support and Resistance Levels

  • EUR/USD – 108 resistance, 200MA support
  • GBP/USD – Weekly open support
  • USD/JPY – 105 major quarter support
  • AUD/USD – Higher lows indicating potential upside

Transcript

Greetings. So today was another interesting day for our trade ideas.

The dollar off of the CPI numbers stayed range bound for the most part, and withstand range bound, both bulls and bears on a day trading basis were able to come in and make money as can be be seeing clearly here again, one of the things that we teach for the methodology is that whenever the 200 period moving average and the100 period moving average are trending pretty much sideways, what you can end up having is you could end up having with both of these trending in a way that they are,you can end up having very volatile prices. So that means price is going up, prices coming right back down to where it just came from. Prices going back up to where it just came from coming right back down.

That happens very frequently whenever we have the 200 period moving average moving sideways and the 100 period moving average moving sideways. So that’s what we’ve been getting with the dollar we do have for the PPI numbers coming in. We do have the dollar resting on its last moving average.

Being the 50 period moving average. It’s below its 100, it’s below its 20, it’s below its 100, and now it’s literally holding on to for dear life, its 50 period moving average after that. The next area of support that the dollar has going from this week, as well as even the latter parts of last week, is going to be this 100 and 350 area.

So this 100 and 350 area is going to need to hold because the range that this one is trading from is from the minor quarter area, this wild card area, 100 and 350 up to the minor quarter area of 100 and 425. So that is the range that you can take trades solidly up and down with these moving averages moving sideways. So with those numbers coming in tomorrow, so those PPI numbers coming in tomorrow at 830, those numbers are expected to be lowered.

Those numbers are expected to go from 2.4 down to 2.2. And very similar way where today’s news with CPI numbers pretty much was priced in, factored in.

So that’s why we didn’t get anything outside of the range that had already been predefined before this news came out. And so with that, we did get that same level of up and down movement with not only just the dollar index, but also with all of our dollar pairs, including and not limited to the UC idea.

So the UC idea again has both of its shorter term moving averages, but not its two longer term moving averages.

The GU idea is up for the week and it’s holding on to its longer trend moving averages, but not its two shorter term. So the 20 and 50 above it with the 102 hundred below it.

The EU idea we have here getting stopped exactly at its 200 period moving average.

And also underneath that 108 area, that 108 area is the area that we talked about coming into Tuesday. We said that that area needed to break and needed to hold. So we did get a break in the 108 area, but we did not get a hold above the 108 area.

So that is something that is going to be on watch with the report for the dollar index coming in at 830 in the morning.

And then we also have for the AU idea. The AU idea is below all of its moving averages except for its 200 period moving average.

Now, one of the things we want to note is that we have a low here, but then we have a higher low here on the drop. So the drop came back, but it made a higher low. Sowe are looking again with this idea as far as on the dollar.

If the dollar does indeed drop, that this idea will continue as far as to make more higher lows as this trend continues to develop. And it seeks to get back not only its weekly open, but also to get back after that 66 cent area after reclaiming all of its moving averages, because it does hold on to its longest term moving average.Interesting to note is that been a few candles since getting a close above these moving averages, because you got a close underneath here, close underneath here.

And so these past five candles have been closes underneath all of this moving averages. Again, signs of weakness. But against a dollar that is weakening, again, that story has to be told.

So we also have here very same thing. So we have a close underneath these moving averages. And so it does have consistent support here with its 100 period moving average and its 200 pivot moving average being underneath its 200 moving average, being underneath this 100 pit moving average.

And this one ended up closing out the day underneath its weekly open as well. So again, looking to see if this one can indeed make a bounce off of this area, off of that weak dollar news. And again with our yen pairs.

So our yen pairs fell last week. All of them got a bounce towards the top of this week. Now we see them kind of balancing out as far as these ideas and this one.

As far as for the GJ idea. The GJ idea is underneath all of its moving averages, but it is still holding on to his weekly open.

The EJ idea is underneath all of his moving averages as well.

It’s holding on to the major quarter level, but also holding on to his weekly open as well.

And the UJ idea is holding on to now its major quarter here for the 105. So this wildcard area here for 105 because it did go down at the earlier part of, well, the latter part of last week as far as down to the major quarter area 142 50.

So this one is also underneath all of its moving averages.

We have the CJ idea as well. This one has come back for a full 100% retracement on the week after getting that bounce towards the middle and end of last week down to that 105 area.

We have the AJ idea again underneath all of his moving averages as well. Balancing out again full 100% retracement on the bounce off of that bounce last week off of the yen. News of potential changes there.

And then you also have, as far as here for the NJ idea, same exact price action. So pretty much the same exact price action for all yen pairs. All those bounces that were early week bounces are meeting resistance around those longer period moving averages and completely doing full retracements off of the moves that they made up.

So again, something to definitely pay attention to tomorrow. We do have those CPI numbers coming out with those, well, PPI numbers coming out. And later on in the afternoon evening, we do have that interest rate decision to see if we are going to remain at 5.5,

Which is the consensus and which has for the most part been priced in, because that is the expectation. So we’ll see if that expectation is met or if that expectation does indeed change. And so I’ll be keeping you guys updated and posted tomorrow, and we look forward to trading with you guys at that time.

Bye.

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