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Price Action Setups Around USD Ahead of Non-Farm Payrolls

Price Action Setups Around USD Ahead of Non-Farm Payrolls

James Stanley, Senior Strategist

Price Action Setups Around USD Ahead of Non-Farm Payrolls

- If you’re looking for trade ideas, please check out our Trading Guides. And if you’re looking for shorter-term trade ideas, please check out our IG Client Sentiment.

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- This is one of the many DailyFX webinars that we host each week, most of which are completely free to all traders. If you’d like to attend this event in the future, or if you’d like to find another of our webinars that may fit your trading style even better, please check out our DailyFX Webinar calendar to find the best session for you.

Talking Points:

- In this webinar, we used price action look at macro markets ahead of the release of August Non-Farm Payrolls out of the United States. To learn more about the methods employed, please check out our educational articles published earlier in the month, listed below:

Using Price Action to Trade Support and Resistance

Support and Resistance in the Forex Market, Part One: Psychological Levels

Support and Resistance in the Forex Market, Part Two: Fibonacci

- The first market we looked at was EUR/USD. On Tuesday, we looked at a potential pin bar formation in the pair after resistance showed around the 1.2000 handle. That daily bar closed as an inverted hammer, and since, we’ve seen prices taper-lower as EUR/USD has finally staged some element of retracement. But, is the retracement over, and are bulls going to stand by the wayside while support levels get taken out? We looked at a key zone for longer-term support to show, and we looked at a secondary zone that could be utilized should support show after tomorrow’s NFP report.

- We then moved over to DXY to show how young or early this top-side advance is. We’re currently seeing resistance on the under-side of a bullish trend-line projection, and we’re far from out of the woods of the bearish theme. But – given how oversold the Dollar has become, a deeper bullish move can certainly develop, even without a robust backdrop of bullish drivers in the Dollar, and tomorrow’s NFP report can add some volatility behind this theme. We looked at two ways of approaching the U.S. Dollar given current price action.

- We then looked at Cable, which is an attractive candidate for USD-strength plays. We looked at an area of resistance from 1.2900-1.2930 that is attractive for short-side continuation setups should resistance begin to show in this area.

- We then looked at USD/JPY, which appears to be at the early stages of filling-in the bullish side of the pair’s four-month range. Just above current prices are a series of resistance levels that can help time the strategy, with a break above 111.15 giving us a fresh monthly high with which to work. Above that, from 111.61-112.40 rests a longer-term zone of resistance, and this could be a secondary area to look for near-term prices to top-out, at which point support becomes attractive from 111.00-111.15.

- We then looked at NZD/USD, which could be attractive for short-side setups to go along with USD-strength.

- We closed by looking at updated setups in EUR/JPY and GBP/JPY, which remain attractive as venues for trading the larger overall risk aversion/return of risk tolerance themes.

--- Written by James Stanley, Strategist for DailyFX.com

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Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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