DXY, USD/JPY Rallies Eyeing Resistance Ahead of U. of Michigan
- DXY rally tags 2016 TL resistance ahead of U.S. data
- USDJPY targeting key resistance range into 107.50/80
- Updated targets & invalidation levels
Technical Outlook: The DXY post-election reversal is back up near resistance with the rally failing at a basic trendline extending off the yearly highs. Heading into tomorrow’s University of Michigan Confidence Survey, the focus is on this resistance with the immediate topside bias at risk while below this level. Ultimately I’d be looking to buy a pullback with a breach higher targeting 99.53 where the 2016 high-day close converges on basic channel resistance.
Look for a possible exhaustion high heading into the close of the week with a move back below the yearly open at 98.69 targeting the monthly open at 98.39 followed by a sliding parallel extending off the 4/12 low (~98.00). Key support & broader bullish invalidation rests at 97.22/26.
Chart Created Using TradingView
Technical Outlook: USDJPY is extending into a near-term resistance confluence at 106.81 with more significant resistance seen just higher at 107.49/82. This region is defined by the July high, the 1.618% extension of the August ascent and slope resistance extending off the 12/18 highs.
As with the dollar index, the immediate advance is at risk heading into these targets with near-term support eyed at 105.55 backed by our bullish invalidation level at 104.64/81- a level defined by the October 13th swing high, the November open & the lower median-line parallel extending off the September low. From a trading standpoint, I’m looking for this rally to push into near-term exhaustion and give way to a pullback which could offer more favorable long-entries.
Other Setups in Play:
- Volatility Isn't Over Yet - NZD/USD Braces for RBNZ Rate Cut
- Election Roadmap for USD/CAD, NZD/USD, USD/JPY & Gold
- AUD/NZD at Key Inflection Point Ahead of RBNZ
- Webinar: Gaps Galore as All Eyes Fall on U.S. Elections
Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016
---Written by Michael Boutros, Currency Strategist with DailyFX
Join Michael for Live Weekly Trading Webinars on Mondays on DailyFX at 13:30 GMT (8:30ET)
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.