USDOLLAR Flirts with Breakdown- Shorts Favored Sub 11960 Ahead of NFPs
- USDOLLAR breakdown testing near-term support into 11880
- Updated targets & invalidation levels heading NFPs / June trade
- Event Riskon TapThisWeek
Chart Created Using FXCM Marketscope 2.0
- USDOLLAR reversal at initial support- 11880/98
- Near-term bias remains bearish while below highlighted region into 11960- bearish invalidation
- Break below targets support objectives at the ML / 11839, backed by 11790
- Daily RSI reversal at 60- (bearish) – now testing support at 50- break would be bearish
- Key Event Risk Ahead: Non-Farm Payrolls on Friday
Notes:A break of the weekly opening range low / MLP support shifted the focus to the downside early in the week the decline now testing an area of key near-term support at 11880/98. Ongoing bullish divergence into the lows suggest we could get another pop off this region but we’ll continue to favor the short-side with interim resistance seen at 11928 backed by our bullish invalidation level into 11960. A break below support targets objectives at 11864 and the 50% retracement at 11839. Subsequent support targets rest lower at 11807 & 11790.
Bottom line: looking to sell rallies / support triggers while sub-11960 with a break below 11880 targeting subsequent support objectives. Expect some volatility heading into NFPs on Friday with the release likely to fuel sharp moves in the USD crosses. The EURUSD setup highlighted in yesterday’s piece remains in play with today’s rally taking out targets into the 1.1277 resistance zone.
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Relevant Data Releases
Other Setups in Play:
- EURUSD Scalp Levels Heading Into ECB, NFP- Longs Favored Above 1.1065
- Scalp Webinar: Key Levels on USD Crosses in Focus Ahead of NFP
- USDJPY Breakout Testing Initial Resistance Ahead of U.S. GDP
- AUDUSD Testing Key Support- Short Scalps Vulnerable Above 7680
- USDCAD Scalps Faces 1.25 Key Resistance Ahead of BoC, GDP
---Written by Michael Boutros, Currency Strategist with DailyFX
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