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Dollar showed tiny bit of retracement last week. The Euro and the New Zealand dollar lost downward momentum and have eased back into the usual range. However, as the Australian dollar rallied sharply higher than expected, the slower pace did not carry over across the board. In the greenback’s pairings with the Canadian Dollar and the Yen, you will see this week’s openings. The former looks to have completed a bit of dollar weakness and is focusing on a momentous upside swing. The latter lags a bit, with an analogous pull-back preparing to offer a long entry in the near future.
EUR/USD
Back in familiar territory
Last week EURUSD closed under 1.54 showing a bearish Three Outside Down candlestick formation. An upward sloping trend line was indicated that has held up price action since August of last year near the 1.53 level. It’s better to wait for a break of this support, waiting for the bearish trend to speed up the move below the 1.50 in case of a breach. The requirement of a confirmed break proved wise – EURUSD bounced from trend line support to return to the middle of the 1.58-1.54 range.
Current positioning indicates a Long White Candle following a period of indecision after the prior bounce at trend line support. This show the bulls hold the upper hand for the time being, with the recent past favoring a return higher to test range resistance below 1.5800. We will look to short EURUSD here to trade the range in the direction of our overall bearish bias.
EURUSD Strategy
1. Short EURUSD below1.5800 on confirmation of a reversal.
2. Set stop loss near 1.5945.
3. Set profit target just above 1.5400, risking 145 pips to gain 397.
USD/JPY Strategy
1. Long USDJPY above 106.00 on confirmation of reversal at trend line support.
2. Set stop-loss near 104.96.
3. Set profit target just below 108.40, risking 104 pips to gain 240.
USD/CAD Strategy
1. Long USDCAD above 1.0130 on Hammer confirmation
2. Set stop-loss near 1.0059.
3. Set profit target below 1.0325, risking 71 pips to gain 195.
1. Short AUDUSD below 0.9560 on confirmation of a bearish reversal
2. Set stop loss near 0.9624
3. Set target near 0.9320, risking 64 pips to gain 240.
12:05
Posted on Jun-23-2008
