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Near-term Setups in USD/JPY, USD/CAD & NZD/USD

Near-term Setups in USD/JPY, USD/CAD & NZD/USD

Michael Boutros, Strategist

Near-term Setups in USD/JPY, USD/CAD & NZD/USD

Here's an update on the setup's I’ll be tracking and levels to know heading into the close of the month. Find a detailed, in-depth review of all these setups and more in today’s Strategy Webinar. The focus shifts back to key US data with the Personal Consumption Expenditure (PCE) on Friday highlighting the economic docket this week.

USD/JPY 240min

USD/JPY 240min Chart

Our focus into the close of the month is on the 110.75-112.25 range with the outlook weighted to the topside while within this pitchfork formation. From a trading standpoint the risk remains for a set-back into support before resuming higher and we’ll be looking to fade weakness early in the week. A breach above targets the upper parallels / 113.05.

Near-term Setups in USD/JPY, USD/CAD & NZD/USD
  • A summary of IG Client Sentimentshows traders are net-long USD/JPY - the ratio stands at +1.66 (62.5% of traders are long)- bearish reading
  • Retail has remained net-long since May 17- Price has moved 1.9% lower sine then
  • Long positions are 2.2% lower than yesterday and 14.8% lower from last week
  • Short positions are 4.6% higher than yesterday and 15.6% higher from last week
  • While broader sentiment continues to point lower for the pair, traders are less net-long than yesterday and compared with last week and softens the bullish signal / highlights the risk for a near-term reversal higher. That said, the focus remains constructive while above key support at 110.75.

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

USD/CAD: The reversal off key resistance and bearish invalidation last week at 1.3334 keeps our focus lower in USDCAD and is a favored play on general USD weakness. The outlook remains unchanged with a break below key support at 1.3141 needed to fuel the next big leg lower in the pair.

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

NZD/USD:We’ve been looking for Kiwi exhaustion but price has simply not turned over. I’m still of the mindset that we’ll see a reprieve here, but patience is the name of the game. The advance remains vulnerable near-term while below the yearly high-day close at 7301 with a break below 7250/60 now needed to shift the focus lower.

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

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or

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

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