Near-term Setups in NZDUSD, EURUSD, USDCAD & USDJPY
USD crosses are in focus as the U.S. Dollar Index posted an outside-day reversal at resistance yesterday. We’re seeing some kickback today & while the greenback may see a reprieve near-term, the risk remains lower while below 12029. Here are the setup’s we’re currently tracking on SB Trade Desk.
NZDUSD- Heading into the RBNZ interest rate decision, I’m looking for a possible washout higher before turning lower. Remember the markets are already expecting at least a 25basis point cut tonight. I highlighted this setup in today’s Scalp Report.
EURUSD- Euro responded to key support noted last week at 1.1060 with the post NFP bounce keeping our focus higher in the pair ever since. Focus remains higher while above the weekly open with the next Big resistance hurdle eyed at 1.1226/30.
USDCAD- The pair took out all the support targets noted yesterday before making a precise rebound off slope support today (which also converged on the monthly opening-range lows). Could see some upside from here but the focus remains lower sub-1.31.
May not be ready to operate on this just yet, but I’m on the lookout for some support in USDJPY over the next few days with the pair continuing to respect near-term trendline off the July low. Expect to see some consolidation but broadly looking for a break of the monthly opening-range, which as of now consists of the 8/2 daily candle (100.68 – 102.83). A breach above median-line resistance would be needed to validate a near-term reversal in the pair.
Keep in mind that SSI stretched into an extreme read of +4.5 as USDJPY rebounded off the August low. The last time SSi was at this extreme was on 7/8, which marked the 2016 low-close. From a trading standpoint, I would be looking to fade weakness into structural support. I’ll update this setup on SB if something materializes.
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---Written by Michael Boutros, Currency Strategist with DailyFX
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