The USD is delicately poised above a support trend line and the next move here may well be determined by the result of tonight’s US CPI and FOMC data release. This, in turn, could trigger decisive moves on the Aussie, Kiwi and Cable. The E/U, U/J, E/J and GBP JPY will also be vulnerable
Aussie: this pair has hovered above the 0.82 level all week and seems to waiting for guidance from the USD. A bullish USD would undermine this pair whereas a weaker USD may enable the Aussie to put in some kind of a bounce up off the 0.82 level:
A/U daily: this pair is about 500 pips part way through a 600+ pip Bear Flag that has been developing over recent weeks. I had thought that 0.80 would be the target for this move but any developing USD weakness might bring this pattern to an early close. The 0.82 will be the level to watch on this pair for any decisive reaction following US CPI and FOMC
Kiwi: the Kiwi has managed to hold the week above 0.77 support but is trading under a recent bear trend line. These two level will be the key ones to watch following tonight’s US data.
Kiwi 4hr: above 0.77 but under a recent bear trend line. Watch for any breakout following US CPI & FOMC though Kiwi daily is still has a potential ‘Bear Flag’ look to it, first noted back in October, and any renewed USD strength could give this a kick-start. USD weakness though would have traders watching the bear trend line above price and, then, for any bullish break above the 0.80 level.
Cable: the GBP/USD has already achieved one bullish outcome today. It has managed to break and close above a bear trend line that has been in effect for over 5 months and, in doing so, has also broken back above the key 61.8% fib of the recent bull move weekly showing 61.8% fib. and also G/U daily has made a daily close above the bear trend line and 61.8% fib. A weekly close above these levels would need to be seen to be convincing here though
USDX: the next move on these three pairs will most likely be determined by the next move on the USD. The USD is delicately poised under key 90 level resistance but is now sitting right on top of a 6-week support trend line and looking like it’s trying to hold on with all its might! A bounce up off this support would weaken the above pairs but any bearish breakdown would most likely strengthen the three i like talking about index because that would determine the strength of USD so we would need to watch out for the support trend line for any bounce or breakdown following US CPI and FOMC
Summary: the next major moves on the Aussie, Kiwi and Cable might be determined by the next directional move on the USD. The US dollar has been bullish for some months now but is currently struggling under 90 resistance. Renewed USD strength would undermine the three pairs but developing weakness would most likely help to support them. The key levels to watch following tonight’s US CPI and FOMC data include:
- Aussie: the 0.82 level.
- Kiwi: the 0.77 level and the bear trend line above current price.
- Cable: the 61.8% fib and bear trend line.
No comments:
Post a Comment