21/02/2014: Trading outlook for today

These major currency pairs continue to consolidate. The price action overnight has done little to change the outlook. Both the Euro and Sterling continue to trade in tight ranges with a slightly corrective look to them, whilst Dollar/Yen also remains rangebound.

EUR/USD is trading in a tight range between $1.3685 and $1.3726. It is currently mid-range. Technical indicators are turning lower in the intraday chart and this could result in pressure on the bottom of the band again. I am looking for a possible trade in the direction of any break either higher or lower. However until this is seen then it is a very tough call to make.

As I said in my trade already this morning, GBP/USD has peaked out at $1.6687 after the initial reaction to the UK Retail Sales data. The falling 89 hour moving average on the intraday chart is the basis of resistance. The momentum indicators all in corrective configuration and turning lower once more suggests Cable will begin to fall away again. I am still expecting a retreat back towards $1.6603 which is the 38.2% Fibonacci retracement of the $1.6250 to $1.6822 bull run and also the support of a previous key breakout.

USD/JPY benefited from improved risk appetite overnight but the rate remains stuck under the 102.83 key resistance. The rate has topped out again at 102.60 and with momentum indicators turning lower once more I am expecting another retreat towards 102 which is a pivot level. I am looking to go short if I see a rally towards 102.50 which would give me a nice stop less than 40 pips under the 102.83 resistance.


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