US Dollar Strength to Gain Momentum Against Forex Majors

EUR/USD

Strategy: Short at 1.3936, Targeting 1.2922

Weekly Profit / Loss: +89 pips

We sold EURUSD at 1.3936. Current positioning is little changed from what we identified last week: prices are showing a Head-and-Shoulders top with a neckline in the 1.3725-1.3804 region, with the near-term downswing guided by a channel established from the June high. We will remain short, looking for prices to take out the neckline as EURUSD heads to the previous swing low below 1.30. As before, a stop-loss will be activated on a daily close above the 06/03/09 wick high at 1.4340.

For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.

GBP/USD

Strategy: Short at 1.6274, Targeting 1.4990

Weekly Profit / Loss: +55 pips

The bottom line for GBPUSD has been little changed since we sold the pair at 1.6274 as prices put in a clear Three Inside Down bearish reversal pattern. We will continue to hold our short position, initially targeting 1.4990. A stop-loss will be activated on a daily close above the 06/03 wick high at 1.6667.



For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.




USD/JPY

Strategy: Flat

Last week we opted to remain flat USDJPY with the pair positioned at the top of a falling channel, looking for an attractive selling opportunity. Turning to the weekly chart, we now see the makings of a Head-and-Shoulders top forming below resistance in the 99.12-100.60 price congestion region. The top of the left shoulder is marked by the top of a falling channel, bolstering the hurdle ahead of USDJPY bulls and strengthening the case for a bearish scenario. A break of the neckline near 93.52 would serve as confirmation, opening a selling opportunity to capture a decline to the low at 87.10.



For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.




USD/CAD

Strategy: Pending Long

Last week, we noted that USDCAD broke above resistance at the top of a falling channel and was stalling ahead of support-turned-resistance at 1.1453. This hurdle has now been overcome, exposing the last barrier to a full-blown bullish breakout at a falling trend line established from the swing top in early March. We will closely monitor prices in the days ahead, looking to enter long on a conclusive close above this juncture to target a return to 1.30.



For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.




AUD/USD

Strategy: Short at 0.7896, Targeting 0.6949

Weekly Profit / Loss: +105 pips

We sold AUDUSD at 0.7896 as prices broke support of a rising channel after showing a Bearish Engulfing reversal pattern. As with GBPUSD, the broad outlines of current positioning are little different from what we observed last week. We will remain short, continuing to target a decline to the previous swing bottom at 0.6949. A stop-loss will be activated on a daily close above the 06/03 wick high at 0.8269.

For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.

NZD/USD

Strategy: Pending Short

NZDUSD is now testing below resistance at the bottom of a rising channel that has guided the pair higher since risky assets (including high-yielding currencies) began to rebound in early March. A daily close below this juncture (now at 0.6318) will expose a selling opportunity to target the previous swing low at 0.4913.

For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.

To contact Ilya regarding this or other articles, please email him at ispivak@dailyfx.com