FXCM/DailyFX Signals and Strategies

Monday's EUR/USD Reversal Range

The EURUSD has opened the trading week within a 30 pip trading range. Resistance, as marked above by the R3 camarilla pivot, resides at 1.3445. Support is currently held below at 1.3415 as marked by S3 support.

EUR/USD 30-Minute Chart

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Range traders will look to take advantage of prices reversals inside of the range as the EURUSD drifts towards either of these pre-defined values. In the event of increasing volatility, the EURUSD could be exposed for a breakout scenario.

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Utilizing camarilla pivots, a breakout would be signaled by price moving above R4 resistance at 1.3460 or below S4 support at 1.3400. Price action moving below 1.3400 would signal a short term move towards lower lows, and indicate a resumption of last week’s trend.

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At this point the market would be signaling a change in market conditions and, range trading should be concluded. Traders can then consider entries with the markets new influenced direction.

New Zealand Dollar at Clear Risk of Further Losses

According to the Speculative Sentiment Index (SSI), a significant move in New Zealand Dollar positioning warns that the NZD may trade to further lows versus the US Dollar.

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Retail traders are now their most net-long the Kiwi currency since it traded near $0.7500 in 2012, and extremely one-sided sentiment warns of continued declines.

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A test of multi-month lows of $0.8400 seems likely, and a break lower makes a move towards year-to-date lows of $0.8100 plausible.

Strategy Video: ECB and RBA Market Movers this Week

Gold Vulnerable If Ukrainian Concerns Fade

Gold's resilience may be threatened if the latest flare-up in geopolitical tensions fails to sustain safe-haven buying for the precious metal. Sellers are likely to emerge at the 1,305 mark.

XAU/USD Daily Chart

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The emergence of a short-term downtrend for gold casts the immediate risk to the downside with a break of 1,280 (61.8% Fib) to open 1,258. A Piercing Line pattern near the nearby floor failed to find follow-through. This in turn casts doubt on the potential for a recovery.

British Pound Forecast Favors Continued Weakness

The Speculative Sentiment Index (SSI) shows that retail traders are near their most net-long the British Pound versus the US Dollar in over a year, and heavily one-sided sentiment leaves Quantitative Strategist David Rodriguez in favor of continued GBP/USD losses:

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"The majority of traders turned net-long GBPUSD as it traded below $1.70, and this was especially significant given that traders had remained short since it crossed above $1.55.

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"There's no way to know whether this flip in positioning will lead a move of the same magnitude, and downside momentum seems stretched in the very short term. Yet remaining below $1.70 keeps our focus on trading towards key lows near $1.67."

In today's video, Quantitative Strategist David Rodriguez identifies currency pairs he believes are poised for a US dollar breakout.

S&P 500 Once Again Defies Gravity, Looks to Trade Higher

Quantitative Strategist David Rodriguez believes the S&P 500 looks poised to continue higher as trader positioning on the SPX500 contract favors further short-term gains:

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"Until we see a larger push below a critical price floor at 1900 and a commensurate move in crowd positioning, we see little choice but to remain in favor of further stock market gains."

Both the Breakout2 and Momentum2 strategies on DailyFXplus.com indicate that USD/CAD may continue higher based on current readings from the Speculative Sentiment Index (SSI).

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Both SSI-based strategies can be automated on your FXCM account using the Mirror Trader platform.

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The same login details you use to access Trading Station will allow you to access Mirror Trader.

In David Rodriguez's weekly update on the Speculative Sentiment Index (SSI) he says the US Dollar is likely to appreciate further versus the Euro, Sterling and Yen.

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"The Euro continues to trade to fresh lows versus the US Dollar, and heavily one-sided crowd positions suggest it could depreciate further before a meaningful recovery."

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"Heavily one-sided positions warn that the British Pound may continue trading to fresh lows versus the US Dollar."

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"The forex trading crowd remains short the US Dollar versus the Japanese Yen for the first time since December, and the substantial shift warns that the USDJPY is at an important turning point."

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View the complete report for SSI data on other currency pairs.

5 Central Bank Decisions This Week

There are five major central bank decisions scheduled this week: the RBA, BoC, BoJ, BoE and ECB. Chief Currency Strategist John Kicklighter breaks them down for us in today's strategy video.



Find out what central bank rate decisions and other events will be covered by live webinars this week with the DailyFX Live Webinar Calendar: http://bit.ly/JohnWebinars

SSI: Bearish bias for AUD/USD heading into Aussie GDP

The ratio of long to short positions in the AUD/USD stands at 2.20 as 69% of traders are long. Yesterday the ratio was 1.56; 61% of open positions were long. Long positions are 8.0% higher than yesterday and 20.3% above levels seen last week. Short positions are 23.3% lower than yesterday and 29.0% below levels seen last week.

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We use the Speculative Sentiment Index (SSI) as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUDUSD may continue lower. The trading crowd has grown further net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.

Trading Friday's NFP Release

This busy week for central bank decisions is capped by NFP on Friday at 12:30 GMT. Expectations are set at 230k jobs added.

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DailyFX instructor Walker England discusses ways to trade this key employment report in today's trading tip.

Jeremy Wagner, Head of DailyFX Education, tweeted this chart today:

"If 5 yr UST yields break higher, then $USDHUF $USDZAR likely to soar"

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Follow Jeremy Wagner's latest trade ideas on Twitter @JWagnerFXTrader

Talking Points:

1. Rising FX volatility levels are amplifying the focus on and impact of monetary policy speculation
2. The US Dollar has seen the most hawkish shift in market positioning while Euro and Kiwi the most bearish
3. Key policy-related event risk next week will quickly indicate if the markets are over-stretched

Sterling Strategy Heading Into Scottish Vote

There has been a lot of speculation and polling conducted to provide predictions about the result of this Thursday's Scottish referendum vote.

Forex Strategy: GBPUSD vs NZDUSD Correlation

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Jeremy Wagner's article today lays out some strategies to trade through what is anticipated to be a highly volatile week.

Also, don't miss our free webinar this Wednesday at 5:30pm British Summer Time (16:30 GMT) - Could the Scottish "Yes" be a good trading opportunity?

Forex Strategy Video: FOMC Strategy for the Dollar and Financial Markets

Talking Points:

1. The Fed's quarterly rate decision with updated forecasts and Yellen press conference is due today
2. A 9-week USDollar rally seems a full adjustment to a hawkish shift in tone, but markets are far from ready
3. We look at the scenarios for the dollar-based majors and broader capital markets for this critical event

Watch DailyFX Chief Strategist John Kicklighter's real time coverage of the FOMC Rate Decision on Wednesday at 17:45 GMT in our Live Trading Room.

SSI: Positioning Mostly Unchanged ahead of FOMC

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Watch DailyFX Chief Strategist John Kicklighter's real time coverage of the FOMC Rate Decision on Wednesday at 17:45 GMT in our Live Trading Room.

Dollar Gains Likely versus Yen, but Watch out for Euro and Sterling

Quantitative strategist David Rodriguez just posted his weekly report on the Speculative Sentiment Index (SSI).

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

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Below is a summary of his calls:

1. EURUSD - Euro at Major Inflection Point
2. GBPUSD - GBP May Bounce, but Wait until After Scotland
3. USDJPY - US Dollar Targets ¥110 versus Japanese Yen
4. AUDUSD - Australian Dollar Remains a Sell until this Changes
5. GBPJPY - British Pound Could Hit Further Highs versus Japanese Yen
6. EURCHF - Euro Likely to Ignore SNB and Test SFr1.20

More details on these trade ideas are available in the full report.

Trading the Hong Kong Dollar, Chinese Yuan and Emerging Markets



Talking Points:

1. Protests in Hong Kong have led to another geopolitical flare up centered on the Emerging Markets
2. While the Hang Seng is more responsive to the developments, the HKD and CNH (Renminbi) are unusual
3. Trading Emerging Market assets and currencies is both an endeavor of unique fundamental aspects and "risk"

EUR/CAD Shorts at Risk Ahead of ECB Rate Decision



Talking Points

1. EURCAD short-side bias at vulnerable- key support 1.4053
2. Weekly opening range in focus heading into ECB
3. Event risk on tap this week