Our short British Pound position has hit its initial objective, floating nearly 700 pips in profit. We now add exposure selling the Canadian Dollar against and establish parameters to do the same with the Euro, both against the US Dollar.
[B]EUR/USD[/B]
[B]Strategy: Short at 1.4710, Targeting 1.4434[/B]
EURUSD has put in a clear Three Inside Down bearish reversal candlestick pattern, with the downward bias seeing added confirmation as the RSI oscillator reverses out of overbought territory showing negative divergence. However, an entry at current levels is not attractive from a risk/reward perspective. We will opt for an entry at 1.4710 with a stop-loss activated on a daily close above 1.4847 (the 9/23 wick high), initially targeting rising trend line support established from the March swing low (now at 1.4434).
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
[B]GBP/USD[/B]
[B]Strategy: Short at 1.6617, Targeting 1.5728[/B]
[B]Weekly Profit / Loss: [/B][B]+684 pips[/B]
We sold GBPUSD at 1.6617 as prices put in an Evening Star on a re-test of support-turned-resistance at a rising trend line established from the swing lows in March. The pair has now moved below our initial objective at 1.6112, allowing us move our stop-loss to break even at 1.6617. The next soft target is seen at 1.5728, the 12/17/08 wick high.
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
[B]USD/JPY[/B]
[B]Strategy: Flat[/B]
The long-term USDJPY down trend that we previously pointed out remains intact. In the shorter term, positioning remains broadly unchanged from what we identified last week: prices are finding support at the bottom of falling channel established from the swing top in April, with a possible upward correction from here to aim for the channel top, now at 96.44. We will opt to stand aside for now, preferring to wait for the upswing and then get short to trade with the dominant trend’s bias.
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
[B]
USD/CAD[/B]
[B]Strategy: Long at 1.0898, Targeting 1.1130[/B]
Last week, we wrote that “USDCAD may be on pace to put in a double bottom above 1.0630 with prices hinting at a forming Morning Star bullish reversal pattern.” This scenario has now materialized, with additional confirmation on a break above falling trend line resistance established from the highs in March as well as positive divergence on the RSI oscillator. We will enter long from here, with an initial soft target at 1.1130 and a stop-loss activated on a daily close below 1.0779.
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
[B]AUD/USD[/B]
[B]Strategy: Pending Short[/B]
The broad outlines of AUDUSD positioning are largely unchanged from what we identified last week, with prices still showing a Rising Wedge bearish reversal pattern with confirmation in negative divergence on the RSI oscillator. We will look for a break below the wedge bottom (now at 0.8518) to trigger a short position.
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
[B]NZD/USD[/B]
[B]Strategy: Pending Short[/B]
As with its Australian counterpart, clear negative divergence on the RSI oscillator keep the NZDUSD bias in favor of the downside as prices resolve potential double top resistance at 0.7222, but a clear sell signal remains elusive. We will continue to look for a daily close below support at a rising trend line from the lows in March (now at 0.6939) to enter short.
For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.
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