The US Dollar suffered a setback last week, losing ground against most major currencies as better-than-expected results from a handful of key earnings reports weighed on demand for the safety-linked currency. Still, positioning suggest that the overall bias remains bullish and we will retain our standing long exposure.
Strategy: Short at 1.3936, Targeting 1.2922
Weekly Profit / Loss: -124 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, with the pair now positioned squarely at resistance and showing a Hammer candlestick, hinting at a downward reversal ahead. 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: -82 pips
We sold GBPUSD at 1.6274. Prices continue to oscillate in a wide range between 1.5960 and 1.6670, with overall positioning essentially unchanged since late May. Near-term support is seen at a rising trend line stretching from the lows in March, now at 1.6139. We will continue to hold short, looking for a break below this juncture to target 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: Pending Short
The Head and Shoulders bearish reversal setup that we identified last week looks to have been confirmed. Turning back to the daily chart to assess the near-term picture, we see that USDJPY has taken out support at 94.41 and this level is now acting as resistance following a bounce from the bottom of a channel that has guided the pair lower since early April. A Hammer has been put in, and we will look for a bearish close on the current candle to offer confirmation and trigger an entry short.
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CAD
Strategy: Pending Long
Weekly Profit / Loss: -285 pips
Last week, we went long USDCAD at 1.1618. This proved premature: USDCAD reversed sharply lower to activate our stop-loss with a close below 1.1417, booking a hefty 285-pip loss. Still, the bullish bias looks to be intact. A new low has now been made and prices are showing an Inverted Hammer on a retest of resistance-turned-support at a falling trend line from the March swing high. We will look for confirmation on a bullish close for the current candle to re-enter long.
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: -199 pips
We sold AUDUSD at 0.7896. Prices retraced higher last week on a corrective bounce from the bottom of a falling channel but are now showing signs of reversal with a Hammer candlestick at the intersection of the channel’s upper boundary and support-turned-resistance at a rising trend line established from the swing low in March. 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: -141 pips
We sold NZDUSD at 0.6305. As with its Australian counterpart, the pair has rebounded since last week. Still, a series of lower highs marked by a near-term falling trend line suggest the directional bias continues to favor bears. A long-legged Doji candlestick is hinting that a reversal lower may be near and we will remain short, targeting April’s swing low 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.
To reach Ilya regarding this article or subscribe to his email distribution list, please contact him at [email protected]
