Near-term Setups in DXY, USD/JPY & Crude
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.
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.
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---Written by Michael Boutros, Currency Strategist with DailyFX
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