Intraday Trading 07.21
|The USD/JPY continued to trade within an ascending channel which has remained intact since earlier this week. Over the next twenty four hours, we will look for price action to bounce off of the lower range of channel and break above the upper trend line, which may in turn validate potential U.S. dollar bullish price action. Daily studies are recovering from oversold levels and our user defined Parabolic SAR has signaled for additional gains. Meanwhile, our speculative sentiment index is at 4.8, down from yesterday’s high of 5.4. All in all, a break above 87.80 may justify price action towards 88.26.|
|After the massive decline last week, the NZD/USD found support at the 20-day SMA and has since then not looked back. On the daily chart, price action bounced off of the 10-day SMA overnight, and now looks poised to test the upper range of the rising channel on the 15 minute chart. It is also worth noting that our speculative sentiment index signals for additional gains in the pair. I will look for bullish kiwi price action from 0.7178 over the next 24 hours.|
|The USD/CAD has come under pressure following yesterday’s BoC rate hike paired with the recent technical developments. Indeed, I am short this pair from 1.0420, with a stop at break even. At the time of this report, the pair is trading at 1.0355. If the recent decline can remain below the 200 day SMA (1.0414), we may see increased selling pressure over the next 24 hours ahead of the Canadian retail sales report, which is forecasted to advance 0.4 percent. Meanwhile, it is worth noting that the pair has broken below the rising trend line from the low of 1.0282 to 1.0510.|
Retail positioning relates to our speculative sentiment index which illustrates where traders are at in the market. The larger the retail positioning circle is under the chart, the more likely it is that longs exceed shorts or vice versa. We will look to use this indicator in conjunction with other technical developments to dictate price action over the next 24 hours.
Every day at 16:00 GMT, we analyze potential 24 hour trade set ups. If the trade is indeed triggered and price action moves in our favor, we will automatically place a stop at breakeven to control any unforeseen losses. The trade becomes no longer valid if it is not triggered in 16:00 GMT the next day.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.