As traders prepare for the Fed chair Powells speech at Jackson hole, it is important to outline the key technical levels in play that would either increase the bullish bias for a currency pair or increase the bearish bias.
In this video, I kickstart your FX trading date with a technical look at the EURUSD, USDJPY and GBPUSD:
EURUSD: The EURUSD fell below a swing area on the 4 hour chart between 1.07738 and 1.07899 on its way to a low for the day at 1.0765. However momentum as turned back to the upside with the price moving back above its 200 day moving average 1.08015. That 200 day moving average will be a barometer for both buyers and sellers through the Fed chair's speech. Bullish above. Bearish below.
On the topside, the swing area between 1.0833 and 1.08485 would be the next target on a more dovish or less hawkish Fed chair. On the downside, will below the 1.07738 would open the door for further selling pressure. The 1.07509 level is a low swing area from the daily chart and would be a target that if broken would increase the bearish bias further.
USDJPY: The USDJPY has been in a trading range over the last 10 days between around 144.60 to 146.50. In between those extremes, is the converged 100 and 200 hour moving averages at 145.68. Moving below those converge moving averages would tilt the by sport in favor of the sellers. On the downside there is a swing area between 144.88 and 145.10 ahead of the 38.2% retracement of the move up from the August low (which comes in at 144.624) will below the 38.2% retracement would open the door for for the downside potential.
Conversely on the topside, a swing area ahead of the high price from August comes between 146.30 and 146.40. Move above that and the high price for 2023 at 146.554, would take the price to the highest level since November 2022. For traders that would be a major break and open the door for further upside momentum.
GBPUSD: The GBPUSD moved below a swing area between 1.2590 and 1.26238 in trading today bottoming at 1.25592. However, the price has since rebounded back higher and trade between that swing area once again. On the topside, get above 1.26238 and then the 100 day moving average at 1.2639 if broken would tilt the bias more to the upside. The 1.2678 – 1.26988 would be the next target on a break of the 100 day moving average.
If the price were to move back below the 1.2590 level, and extend below the low for the day at 1.25592, there is a swing area between 1.2536 and 1.25472 to get to and through.
