Key levels one to watch for king Dollar!
Updated
Trade Set up – Following on from our previous analysis, we feel a break above the YTD high of 97.20 would signal a bullish confirmation and this comes at a time when so many other G10 currencies just hold so few attractions. Our entry is set once price breaks the highs, although the preference, as always, is to avoid the initial break and buy the re-test.
Our medium-term target remains unchanged at 98.00, with potential for a bull case of 100, although we see growing risks of a decent USD reversal in Q1.
Short-term risk management would see our stop loss below the previous daily close and longer-term outlook below the recent support level of 96.00.
Why We like this trade – With a strong focus on current price levels, a break above the YTD high would signal a strong bullish trend and confirm our original thoughts. Naturally we want to focus on potential price drivers and these fall on US CPI -0.45% and retail sales this week, as well as Jerome Powell’s speech on Thursday. That said, we also want to see ifEURUSD -0.26% can break 1.1301. German Q3 GDP (due Wednesday) should contract 10bp, and highlight just limited the ECB are in ever raising rates, while the Italian debt debate will be front and centre again this week. A move through 1.1301 should push USD index through the highs given the EURs 0.00% 57% weighting on the basket.
It’s interesting to note the key 50- and 200-day EMA have held firm, with strong rallies in price once these levels have been tested in the past.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Our medium-term target remains unchanged at 98.00, with potential for a bull case of 100, although we see growing risks of a decent USD reversal in Q1.
Short-term risk management would see our stop loss below the previous daily close and longer-term outlook below the recent support level of 96.00.
Why We like this trade – With a strong focus on current price levels, a break above the YTD high would signal a strong bullish trend and confirm our original thoughts. Naturally we want to focus on potential price drivers and these fall on US CPI -0.45% and retail sales this week, as well as Jerome Powell’s speech on Thursday. That said, we also want to see ifEURUSD -0.26% can break 1.1301. German Q3 GDP (due Wednesday) should contract 10bp, and highlight just limited the ECB are in ever raising rates, while the Italian debt debate will be front and centre again this week. A move through 1.1301 should push USD index through the highs given the EURs 0.00% 57% weighting on the basket.
It’s interesting to note the key 50- and 200-day EMA have held firm, with strong rallies in price once these levels have been tested in the past.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Trade active
As per our trade set up, entry above the previous high of 97.20Trade active
Half position closed - With price falling short of target 1 and a bearish engulfing weekly candle close, we look to close half the position. Remaining position to hold as price confirms uptrend with higher highs and higher lows. Stop loss as per trade set up, with a daily close under 96.00Note
Update - 96.00 price level holds firm with the 50% retracement as major support. A break below would close our remaining position and confirm a change in trend to the bearish side, however, a continued bullish move to 98.00 would signal strength in the Dollar and an option to add to our position.Trade closed: stop reached
As per our trade set up, remaining position closed.
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