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Near-term Setups in NZD/USD, EUR/JPY, EUR/USD & AUD/USD

Near-term Setups in NZD/USD, EUR/JPY, EUR/USD & AUD/USD

Michael Boutros,

Here's an update on the setup's we've been tracking and levels to know heading into the close of the week. Now that we’ve gotten all the headline risk out of the way, the focus shifts back to price action and the monthly opening ranges.

NZD/USD: I highlighted this setup in today’s scalp report and the base-case scenario calls for a near-term exhaustion high into key confluence resistance around 7230. The broader focus remains higher while above 7090.

EUR/JPY: The rebound off key confluence support highlighted yesterday extended into the upper median-line parallel, capping today’s advance for now. The levels / outlook are unchanged into the close of the week with the focus remaining on a clear break of the 122.67 – 123.65 range.

EUR/USD:The levels / outlook remains unchanged for the euro with the broader rally vulnerable near-term below resistance at 1.1285. I’ve been playing shorts against this region all week and while we’re testing the weekly lows now, price looks to be losing steam here on the back of the James Comey testimony. That said, I’ll be looking for near-term exhaustion / long-entries on a move into 1.1160s.

See our 2Q EUR/USD projections in the DailyFX Trading Forecasts.

EUR/USD Sentiment
  • Note that a summary of IG Client Sentiment shows traders are net-short EUR/USD- the ratio stands at -2.53 (28.3% of traders are long)- bullish reading
  • Long positions are 6.0% lower than yesterday and 4.5% higher from last week
  • Short positions are 2.7% lower than yesterday and 10.9% lower from last week
  • While broader sentiment continues to point higher for the Euro, it’s worth noting that continued reduction in short-positions from last week leaves the immediate long-bias vulnerable while below resistance. That said, from at trading standpoint, I’ll still favor fading weakness while above structural support around 1.1160.

What do shifts in retail positioning hint about the broader Euro trend? Learn how Sentiment can help your trading in this free guide !

AUDUSD 240min

AUD/USD 240min Chart

AUD/USD:The ascending pitchfork formation noted earlier this week has continued to offer clear guidance with the rally extending into topside targets at 7540 before failing at the 50-line. Note that this rally completes at 100% extension off the highs and leaves the immediate advance at risk while below 7560. Focus remains higher while above 7520 for now- a break below this mark risks a decline towards our broader bullish invalidation- which has now been raised to 7469.

---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.