Breakdown of Major Forex Pairs

Breakdown of Major Forex Pairs

2022-12-19 • Updated


Even though we've only witnessed sluggish movements from the Dollar over the past few weeks, the general idea and bias still seem intact and untampered. The bullish impulse however can be seen as "searching for support". This simply means that price is strategically searching for an area with sufficient demand to push prices higher.

The setup above shows a break out of the small range between the 107 and 104 price area with a possible retest of the drop-base-rally demand zone. There is also a divergence from the stochastics as well as the 50-Moving Average contributing to the trade idea.



The 4-Hour timeframe of EURUSD presents us with an interesting opportunity. Here, we see the trendline resistance fitting into the rally-base-drop supply zone and the "golden zone" of the Fibonacci retracement (61.8%). All these present us reasons to expect a decline in prices possibly to the 1.018 area.



GBPUSD presents a case similar to what we've seen from EURUSD, however, from the Daily Timeframe. We see price filling up the Fair Value Gap (FVG) between 1.997 and 1.892 area with a touch of the 88.2% Fibonacci retracement. The trendline resistance is also a contributory factor to consider in favour of a bearish impulse.



AUDUSD is trading inside the descending channel on the Daily timeframe and has just recently given an initial reaction to the trendline resistance and the FVG (Fair Value Gap). Price is however retracing slightly towards the 100-Day moving average which should serve as sufficient resistance to push prices lower. A long-term selling opportunity could be brewing here!



NZDUSD is at the moment 'dancing' around the trendline resistance from April. To the left, we can see the drop-base-drop supply zone aligning with the 76.4% Fibonacci level. Considering the possibility of a stronger Dollar, this looks like a textbook setup for a bearish impulse.


How Did EUR React to the ECB Meeting? 
How Did EUR React to the ECB Meeting? 

The European Central Bank (ECB) has raised interest rates by 25 basis points, marking its tenth consecutive rate hike since July 2022 and bringing the total increase to 450 basis points. The ECB is primarily concerned about high inflation levels, both current and projected, with concerns extending into the future.

Can the CPI Release Reverse The USD? 
Can the CPI Release Reverse The USD? 

The upcoming August inflation data may send mixed signals. The 12-month headline inflation rate is expected to rise to 3.6%, causing concerns for the Biden administration. However, core inflation, which excludes food and energy prices, is projected to decrease to 4.3%, aligning with the Federal Reserve's goals. Past price trends influence both figures, so looking at recent data for a more accurate picture is crucial.

Will the NFP help the greenback?
Will the NFP help the greenback?

The odds of a final interest rate hike by the US Federal Reserve (Fed) this year have dropped after US job openings hit their lowest levels since early 2021. This has led to a correction in the US Dollar as traders reduced their bets on further rate hikes.

Latest news

Gold is Rising Despite Inflation Returns
Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.

Can the Chinese Economy Recover?
Can the Chinese Economy Recover?

Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

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