Webinar: USD at Support (Old Resistance) - Price Action Setups
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The U.S. Dollar is currently working on a retracement after the massive November breakout ran to a long-term level of resistance at 101.80. With near-term price action in the U.S. Dollar currently showing support near an area of old resistance (the previous 13-year highs, which also came-in as a double-top), and the prospect of continuation plays exists. We extrapolated by looking at various pairings with which traders may want to plot for a USD-continuation move versus those that they may want to look for continued USD-weakness.
- For USD/JPY – the big risk is that the trend has run too far, too fast. But despite the USD pullback over the past week, USD/JPY has remained well-supported, highlighting the fact that we’ve seen Yen-weakness continuing as a prevailing theme, even when USD-strength hasn’t been able to continue pushing the pair-higher.
- For AUD/USD – this would be a shorter-term setup, using the psychological level at .7500 as a basis for risk, with targets set towards .7330 and then the confluent zone around .7200.
- For USD/CAD – currently at an interesting level of support at 1.3250. This is a major psychological level, as well as being the swing-high in July and again in September. Targets on top-side positions would likely want to take into account prior support around 1.3400 before looking for a continuation move beyond that.
- For NZD/USD – the long-term zone of support between .6950-.7050 continues to hold support in the pair as it has for much of the summer. Until this zone breaks, traders would likely want to approach with some element of a bullish bias; as we’ve seen an extremely dovish RBNZ with even a rate cut over this summer, yet support has continued to hold price action.
- For GBP/USD – The British Pound has been exuberantly strong throughout November, even stronger than the U.S. Dollar as the currency was staging fresh 13-year highs. This is likely a reverberation from the massive movement in GBP/USD around this summer’s Brexit referendum, in which the currency staged a -20% deluge, which will likely end-up leading to stronger inflation in the months/years ahead.
--- Written by James Stanley, Analyst for DailyFX.com
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