Remain Short EURCHF (Stop at 1.30), Short USDJPY ; Flat NZDUSD
The EURCHF is relatively unchanged on Tuesday despite Germany’s unemployment rate falling to its lowest level since November 1992, while the final reading for Euro-Zone’s PMI manufacturing rose to 57.3 amid expectations of 56.9. Also crossing the news wire, the Kingdom of Spain’s rating at AA/A-1+ was affirmed by Standard and Poors. The credit rating agency also cited a negative outlook for the region. The next couple of days will be very interesting for our EURCHF trade as the pair manages to stick around its key resistance area. Indeed, we are short from 1.295, with a stop at 1.30 and an open target. As concerns in the bloc remain, I will keep my position open as technical indicators begin to paint a bearish picture.
Meanwhile, I decided to exit my NZDUSD short position at breakeven as a breakout above the previously mentioned resistance area looks to be in the horizon. Furthermore, the “crowd” is short position, providing the contrarian signal to long the pair. A break and close above 0.78 may lead me to enter into a long position.
With regards to new trades, I entered a short USDJPY position at 81.82during the overnight session. As I am currently in the money, I will look to place my stop at break even. The break below the key 82 level lead me to enter into this position. This level coincides with a break below the asymmetrical l 4 hour triangle. My first target will be 81.0. As currency traders attempt to pick out a bottom in the USDJPY without the positive fundamental drivers behind the U.S. economy, further downside risks will likely be the result. Friday’s nonfarm payrolls report will paint a clearer picture for USD traders.
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