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Home / Market Analysis / December 25: The Best Forex Setups For The Last Trading Week In 2016

December 25: The Best Forex Setups For The Last Trading Week In 2016

Last week was one of the best weeks in all 2016, especially after the nice turnarounds that we have seen in some of the JPY pairs that I highlighted during last week’s webinar. This week’s watchlist also comes with some super interesting setups but since we are going into the year end, I expect to see a further drop in volatility and momentum. If you decide to keep trading next week, I recommend you go to the lower timeframes and don’t expect any extended moves.

In the meantime, Moritz and I are preparing a HUGE new project for Tradeciety which will be launched during January and we will improve the learning environment further to help more trades and in more effective ways. So stay tuned 🙂

 

AUD/CHF

The AUDCHF has reached the 0.735 support area and closed right at it last week. The momentum still looks very bearish and a push lower into 0.725 seems likely at this point. 0.725 is my preferred support level where I would get interested in a long reversal trade. The level is still quite far away but I keep this pair on my watchlist. If we see a bullish bounce at the current levels, it also could offer a very short term long opportunity on the 1H chart.

audchf

 

CAD/JPY

The CADJPY is breaking its daily 20 SMA which could lead to more selling after price bounced off the 89 resistance. Similar to many other JPY pairs, we are already seeing more bullishness but if it holds up, there might be a longer term reversal opportunity here.

cadjpy

 

Dollar Index

The US Dollar edged lower after the 103 resistance held. Keep in mind that we are going into the year end and I don’t expect to see any major changes in market trends. For 2017, the path for the Dollar seems to be higher, especially when looking at the Trump plans and the FED rate hike outlook. However, the retracements on the US Dollar are deep and extended as we can see on the daily chart which often offers decent reversal opportunities on the USD related pairs, especially on the 1H chart.

dollar

 

EUR/JPY

The EUR/JPY is making lower highs on the daily chart which is the first sign of fading strength. Price is still trading close to the highs and well above the 121.50 support level but it seems like price is putting in a market top. Remember that the Yen benefits from safe haven flows. US stocks have consolidated for the past 2 weeks and additional selling could help the Yen.

There are plenty of early Yen reversals shaping up right now and you can pick the with the best momentum once the reversals start to unfold.

eurjpy

 

Gold

Gold has found support at the 1120 support level which I pointed out a few weeks back. The year end is usually quieter so I don’t expect any major moves going forward but gold is trading at a level where long opportunities are more attractive again. I am waiting for a clear bottom formation with more bullish momentum for now.

gold

 

USD/CAD

The USDCAD is still moving higher but it’s coming close to the 1.36 resistance area. The trend structure on the 4H looks interesting and if the US Dollar sees additional profit taking, this chart might offer an interesting reversal opportunity with decent downside potential.

usdcad

 

USD/JPY

And the last JPY related pair is the USDJPY. This pair could benefit from both, the fading USD bullishness and additional Yen bullishness. The 4H shows a triangle consolidation and a break of the 116 could open the room for more selling. Last week was the first time in 7 weeks that the USDJPY closed lower and it happened right in the resistance zone between 119 and 116.

usdjpyt

 

 

 

 

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4 comments

  1. Hi Rolf!

    Im following EURJPY on the Last days and on D1 line chart is possible to see head and shoulder formation. Do you a agree with that? I guess thats a pretty reversion parttern if confirmed.

  2. Rolf, you probably heard this many times, but I want to highlight your talent of taking hard-to-understand concepts, digest and explain them in a simple and actionable way. This is truly a rarity. I stumbled upon your site when trying to find answers to my poor risk management record and your site is a stand-out among many I flipped through. Thanks again and keep up the good work.

    • Hi Andriy,

      thank you for taking the time to leave such a nice comment. I am glad to hear that you like what we are doing here. More great things to come in 2017 🙂

      All the best
      ROlf

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