april 4, 2014 forex trading strategy update
DESCRIPTION
Vito Henjoto's Forex Trading Strategy update for April 4 covered non-farm payroll numbers and currency pair EUR/USD, GBP/USD, EUR/JPY, USD/JPYTRANSCRIPT
Forex Trading Strategy Update
with Vito Henjoto April 4, 2014
Good morning everyone. This is Vito Henjoto, Senior Technical Strategist
at Invast Financial Services and today is the 4th of April 2014. NFP day is
today.
The market has been pretty much preparing itself for what’’s going to
happen tonight. The numbers are expected to come out really bullish. The
forecast was for 199,000. The previous number was 175. This time around
though, I have a little bit of a suspicion about the numbers here. My
personal view on the non-farm numbers is it’s going to be about 180 to
185,000. We might see a little bit of a gain from last month, but are we
going to be seeing that drastic gain that the market is so bullish about? It
was 199. I have my doubts. Three out of the four unemployment claims in
the past month actually has come in below forecast. My expectation is
between 180 to 185,000.
Let�’s take a look at the currency pairs here. What is in store for the
EUR/USD, GBP/USD, southern Japanese Yen crosses as well?
Take a look at the EUR/USD here. We�’re seeing a little bit of support
coming in at 1.37. The EUR/USD fell on the back of ECB’s rather dovish
comment using the unconventional method to stave off the low inflation,
but they haven’’t done anything as of yet. Right now, for the EUR/USD, we
have support at 1.37 from a technical point of view, and as long as this
level holds, we might see a continuous grind attempting to break upside.
The current range is basically between 1.37 to 1.38. That’s the expected
range for the day here, when you see a confirmed close, at least about
1.3790, on the 4-hourly time frame which will take the pair above the
Ichimoku cloud here on the 4-hourly time frame. To position our self, right
now, I much prefer going long right here on the support at 1.37.
Stop loss should be really tight here. If we are attempting to go long, our
stop loss will be at least below 1.3675 and in terms of intraday target we
are going to be looking at 1.3750 - 1.3775. We might see a little of
rejection or stalling right around that level as price attempts to break above
the Ichimoku cloud here as well as this trend line that’s keeping the market
in check. This is in the form of a descending triangle. The problem with this
--- it happens in an uptrend, so it might be more of a continuation pattern
rather than anything else. On the flip side, if it does break below the 1.37
level, we should keep a close eye because we have a major trend line that
is slightly below that level there, at 1.36.
Take a look at the daily time frame here. The Stochastics --- attempting to
dip below the trail level. If it does cross up and come off the oversold
condition, we can see that rarely happen in the EUR/USD.
Similar scenario with the GP/USD. The GP/USD, I think in the past videos
and during the live market analysis, I did mention that there�’s a support
trend line here and if it does break below, we’’re looking for a return
towards the zone here at 1.6575. It did happen. The price kind of bounced
off slightly from 1.6575. Right now, the Ichimoku cloud is still strong. It’s
starting to build up more support here. As long as we don�’t go any lower
than 1.6575 intraday wise, then we might see a bounce happen on the
GP/USD as well. The EUR/USD and the GP/USD --- there is a much
higher probability that the USD is actually going to go a little bit weaker. So
the EUR/USD and the GP/USD might see some sort of recovery today.
Another thing to take a look at is the EUR/JPY here and the USD/JPY.
This is the EUR/JPY. We are right now at 142.50 still holding on pretty tight
here and not letting go. This is actually previous resistance area, previous
support area, and even though prices are trading below the Ichimoku
cloud, this is on the early time frame, the Stochastics is within the oversold
region. If it does cross back up above 20, then we might see a little of a
push higher.
How far up can the EUR/JPY go? Well, take a look at this one here. This
will be our Fibonaccci to look at. We have 61.80 percent, a 143 and that is
pretty much at the top of the range of the Ichimoku cloud. So that will be
resistance number one at 143 and beyond that it‘s going to come in very
close to the major fit levels here and that would be a 38.6 percent at
143.65. Between 143 – 143.65, we are likely going to be seeing a little bit
of a resistance there on the EUR/JPY.
Next up is the USD/JPY. Again, unable to close above 104 on the
USD/JPY. However, take a look at the momentum here. This is still likely
going to be pretty strong. We�’re just waiting for the pull back to happen.
Initially, we are going to be looking at pull back around 103.50 area, so
between 103.40 - 103.60 that's where the [indiscernible] is located. If it
does go below that level there, then it might go down to 103 before we see
any bounce happen on the USD/JPY. Keep in mind for now, overall the
USD/JPY is still very bullish. Attempting to go short right now is rather
risky because we don�’t see any strong selling pressure on the USD/JPY.
So that’’s all for today and good luck with your trades. Again, NFP numbers
tonight --- very interesting to see what happens. Is the Fed going to taper
or not going to taper? It�’s not really a matter of just the employment
numbers right now as the others have mentioned before. They’’re not really
just taking a look at the employment numbers. So we will see how the
market reacts to that and good luck with your trades. I’’ll catch you guys
next week.
Watch Vito’s videos here - www.youtube.com/InvastInsights