The US Dollar has pulled back considerably since risky assets began to rebound in early March, shedding as much as -7.8% on average against its top counterparts. Now, all signs appear to suggest that the greenback is ready to resume upward momentum, setting up attractive entry opportunities against the spectrum of major currencies.
[B]EUR/USD[/B]
[B]Strategy: Short at 1.5510, Targeting 1.2456[/B]
[B]Weekly Profit / Loss: +173 pips[/B]
We first sold EURUSD at 1.5510. The pair reversed last week’s gains and is now once again positioned ahead of 1.31, a level that has acted as both support and resistance in recent months. Prices are showing a Hammer candlestick, suggesting a shallow upswing may be in the cards ahead. Still, the series of lower highs since the latest major up move topped out in mid-March point to a bearish bias. We will remain short, looking for a break of near-term support to challenge the double bottom near 1.2460 once again.
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
[B]GBP/USD[/B]
[B]Strategy: Pending Short[/B]
[B]Weekly Profit / Loss: -380 pips[/B]
Two weeks ago, we sold the British Pound at 1.4450 noting bearish next-day confirmation following a Dark Cloud Cover candlestick pattern. Last week, the rebound in risky assets took sterling higher at the expense of the US Dollar, taking out our stop-loss and booking 380 pips in losses. Still, our bias remains bearish as we see bullish momentum giving way to form a potential double top ahead of the 1.50 mark. Bearish cues are significant, with a Spinning Top followed by a pair of progressively lower Hammer candlesticks. Still, we see it prudent to proceed with caution as prices resolve support 1.4860, a level that has market the tops of the previous two upswings. A daily close below this level will open the door to renew our short position. Updates will be posted on the Candlestick forum.
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.[I]
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[B]USD/JPY[/B]
[B]Strategy: Pending Long[/B]
Last week we wrote that USDJPY was testing familiar resistance in the 99.11-99.73 congestion region, with a break higher setting the stage for a major rally aiming in the vicinity of 110.00. The breakout has now materialized and prices have conveniently pulled back to re-test resistance-turned support to offer an attractive entry price. Still, we will proceed with caution and look for signs of bottoming in the days ahead to signal that bullish momentum is ready to accelerate before entering long. Updates will be posted on the Candlestick forum.
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[B]USD/CAD[/B]
[B]Strategy: Long at 1.2188, Targeting above 1.30[/B]
[B]Weekly Profit / Loss: +1 pip[/B]
We initially bought USDCAD 1.2188. Last week, we opted to remain long despite a deep pull-back as prices approached support at a rising trend line established from the low in November 2008. Current positioning sees the pair has put in back-to-back Doji candles having tested this juncture, bolstering the case for a near-term return to bullish momentum. Initial resistance is seen at 1.2670, with a break higher aiming to challenge the major triple top near 1.30.
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
[B]AUD/USD[/B]
[B]Strategy: Pending Short[/B]
Last week, we noted that AUDUSD hinting at the makings of a triple top below 0.7250. Signs of ebbing bullish momentum have emerged with a Deliberation candlestick pattern followed by a series of perpetually lower short days as prices inch towards near-term support near 0.7060. A convincing daily close below this level will open the door for a fresh short position, targeting the slightly upward-sloping trend line established from the lows in October. Updates will be posted on the Candlestick forum.
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
[B]NZD/USD[/B]
[B]Strategy: Pending Short[/B]
Last week we saw NZDUSD working on a bullish breakout with prices pushing above the upper boundary of a falling channel that has contained the pair since mid-October. While this has materialized, we may not see much follow-through with NZDUSD showing an Evening Star bearish reversal pattern on a test of substantial resistance in the 0.5929-0.6054 congestion area. We will look for a daily close below resistance-turned support at the channel top (now at 0.5697) as confirmation and enter short to trade with the long-term downtrend. Updates will be posted on the Candlestick forum.
For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.
[I]To contact Ilya regarding this or other articles, please email him at <[email protected]>[/I]