The US Dollar looks to be gaining traction against the forex majors. Our long positions against the British Pound and Australian Dollar have performed particularly well, 94 and 153 pips from last week, respectively. We have now added a position selling the Canadian Dollar against the greenback to our overall exposure.
Strategy: Short at 1.3936, Targeting 1.2922
Weekly Profit / Loss: -2 pips
We sold EURUSD at 1.3936. Overall positioning is essentially unchanged from last week: prices continue to consolidate in a well-defined range below 1.4141 and we will remain short, looking for prices to take out the range bottom at 1.3742 as EURUSD heads to the previous swing low below 1.30. As before, a stop-loss will be activated on a daily close above the 06/03/09 wick high at 1.4340.
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Strategy: Short at 1.6274, Targeting 1.4990
Weekly Profit / Loss: +94 pips
We sold the pair at 1.6274. The down trend has started to accelerate, with prices breaking below resistance-turned-support at the upper boundary of a rising channel that had guided the pair since the lows in March and was broken to the upside in May. A relief rally following a challenge of the psychologically significant 1.60 level is unlikely to see much sustained traction beyond a re-test of the channel top (now at 1.6469) and we will continue to hold short, initially targeting 1.4990. A stop-loss will be activated on a daily close above the 06/03 wick high at 1.6667.
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Strategy: Flat
USDJPY positioning is effectively unchanged from what we noted last week: an Evening Star below resistance in the 99.12-100.60 price congestion region bolsters the possibility of a forming Head-and-Shoulders top with a neckline near 93.52. Prices are now testing below this juncture, with a confirmed break (in this case, a weekly close) opening a selling opportunity to capture a decline to the low at 87.10. As before, the upper boundary of a falling channel reinforces resistance and strengthens the case for a bearish scenario.
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Strategy: Long at 1.1618, Targeting 1.2396
Last week, we wrote that USDCAD was testing key resistance at a falling trend line established from the swing top in early March. This has now been overcome and we will enter long, initially targeting 1.2396. A stop-loss will be activated on a daily close below the 06/24 wick low at 1.1417.
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Strategy: Short at 0.7896, Targeting 0.6949
Weekly Profit / Loss: +153 pips
We sold AUDUSD at 0.7896. Prices have now overcome near-term support at a rising trend line established from the swing low in early March, pointing to an acceleration of bearish momentum. We will remain short, continuing to look for a decline to the previous swing bottom at 0.6949. As before, a stop-loss will be activated on a daily close above the 06/03 wick high at 0.8269.
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Strategy: Short at 0.6305, Targeting 0.5522
Weekly Profit / Loss: -2 pips
Last week, we sold NZDUSD at 0.6305 as prices broke below the lower boundary of this channel while showing a Three Black Crows bearish reversal signal, a formidable sign of continued downside ahead. Positioning has been little changed since then and we will remain short, initially targeting April’s swing lows at 0.5522. A stop-loss will be activated on a daily close above 0.6601, the 06/02 wick high.
For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.
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