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Near-term Setups in DXY, USD/JPY & Crude

Near-term Setups in DXY, USD/JPY & Crude

DXY 120min

DXY 120min Chart

We’ve been tracking the ascent in the DXY for the past few weeks and heading into U.S. NFPs tomorrow, the focus remains on the upper parallel (red) with a breach above the monthly opening-range highs at 102.26 needed to mark the next leg higher in the index. Interim support rests with the monthly open which converges with the lower median-line at 101.44. We’ll be looking for a resolution of this key near-term range to offer further guidance on our near-term directional bias.

USD/JPY: The outlook / levels for USDJPY remain unchanged from last week with a break of this week’s opening range keeping the long-bias in play for now. Heading into NFPs 115.50 & 115.93-116.08 are regions of interest of possible near-term exhaustions / resistance. Support & near-term bullish invalidation raised to 113.57.

Crude Daily

Crude Daily Chart

We’ve highlighted the risk to the crude outlook as prices probed critical resistance last week at 54.75-55 with the pullback off this level now testing a key near-term support zone at 48.70-49.07. This region is defined by the 38.2% retracement of the July advance, the 50% retracement of the November advance and the 200-day moving average.

Keep in mind that this decline technically compromises the 2017 opening range and while the broader risk remains for a larger setback in prices, near-term we must respect a rebound off this mark. Interim resistance stands at 50.60/80 backed by bearish invalidation at 51.46/64. A break lower from here targets subsequent support objectives at the 61.8% retracement at 47.16 & basic trendline support extending off the April low, currently ~46.30s.

Looking for trade ideas? Review DailyFX’s 2017 1Q Projections

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.