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US Dollar Testing Yearly Highs
US 3Q GDP figures were mixed on Friday and although the headline print beat estimates, a weaker than expected read on Core PCE (Personal Consumption Expenditure) casts a shadow on the inflationary outlook. The greenback was under considerable pressure after on Friday with the US Dollar Index (DXY) turning from the yearly high-day close at 96.71- A close above this region is needed to keep the focus higher with the long-bias at risk while below this level near-term. Technical setups on the commodities also keep the gold and crude trades in focus this week- here are the targets and invalidation levels that matter.
Key Trade Levels in Focus
DXY – Resistance at the high-day close at 96.71 backed by 97.00/10 – risk for exhaustion at one of these levels.Support / near-term bullish invalidation at 96.07/13.
EUR/USD – Price would need to stabilize above 1.1345 early in the week- resistance breach above 1.1432 to validate a reversal. A break lower exposes yearly low at 1.1301.
USD/CAD – Critical resistance range at 1.3130/55- looking for possible exhaustion while below. Support at 1.3067/75- break there needed to shift focus lower.
USD/JPY – Looking for failure into 113.08/27- Break below yearly up-slope support / 112 would be exposes 111.46/ 60.
Gold – Critical resistance at 1235/38. Interim support 1221/22 backed by 1214. Bullish invalidation at 1208.
Crude Oil – Immediate focus to start the week is on key support zone at 65.27/82, short-bias is at risk while above this level near-term. Bearish invalidation steady at 69.17/60. A break lower exposes 64.40 backed by the June low at 63.57.
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It’s a big week of event risk with central bank interest rate decisions from the BOJ & BOE (Super Thursday) highlighting the economic calendar. Heading into the close of the week, its jobs Friday with US Non-Farm Payrolls (NFP) and Canada employment figures on tap. In this webinar we review updated technical setups on DXY, EUR/USD, USD/CAD, Crude Oil, Gold, USD/JPY, S&P 500 (SPX), TNX (10yr Treasury Yield), AUD/USD, NZD/USD, GBP/JPY, GBP/USD, EUR/JPY, GBP/NZD and GBP/AUD
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Key Event Risk This Week
Economic Calendar - latest economic developments and upcoming event risk
Active Trade Setups:
- EUR/USD Price Outlook: Euro Sell-off Intensifies– Support In View
- GBP/JPY Price Outlook: Bears Pound Support to Fresh Lows
- Crude Oil Price Outlook: WTI Breakdown Testing Initial Support
- USD/CAD Price Outlook: Canadian Dollar on the Edge ahead of BOC
- Gold Price Outlook: First Major Test for the XAU/USD Breakout
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com
