US dollar bounces back towards recent highs
The US dollar has been mostly range-bound for a year now. As you can see in the daily chart below, the US Dollar Index has been held by a gently upward-sloping channel, and has recently recovered towards the upper end of the range.
With no clear trend to follow, swing trades for more than a day or two are a thing of the past. Traders must focus on short-term volatility for scalping opportunities.
AUD/USD has moved sideways in a 48-pip range all this week.
If AUD/USD holds minor resistance at 0.6775/80 we target two-week trendline support at 0.6745/40. Be ready to sell a break below 0.6735, targeting 0.6720 and support at 0.6685/75. Try long positions with stops below 0.6660. A break lower is an important sell signal initially targeting 0.6610/00 and 0.6560/50.
Holding above 0.6780 targets a selling opportunity at 0.6820/30. Place stops above 0.6840. A break higher is a buy signal targeting 6876/80 and strong resistance at 0.6910/20. Try shorts with stops above 0.6935.
NZD/USD has moved lower this week as we held resistance at 0.6435/40 to target 0.6420, and yesterday hit eight pips above support at the August low (so far) at 0.6385/75. Long positions need stops below 0.6360. A break lower is an important sell signal initially targeting 0.6345/40, then 0.6305/00.
The first resistance is at 0.6415/25, but a move above 0.6435 targets a selling opportunity at 0.6475/80, with stops above 0.6490. A break higher initially targets 0.6535.
For USD/JPY the key resistance is at 106.75/85, and short positions here need stops above 107.00. A break higher is a buy signal targeting 107.20/25 and 107.35/40, perhaps as far as strong resistance at 107.65/70.
Holding key resistance at 106.75/85 targets minor support at 106.45/40 and again at 106.10/00. A break lower is a sell signal targeting 105.80/70 and 105.45 before important support at the January (and 2018) low at 104.95/65. Buy with stops below 104.30.
EUR/USD holds the only support at 1.1075/65 so far this week. Another bounce re-targets 1.1110/16. A break higher meets many barriers which have built up with the long sideways trend over the past few months.
There is strong resistance at 1.1145/50, again at 1.1170/80 and then again at 1.1215/20. Bulls need a breakout above 1.1230 for the chance of a trend to follow.
The only support today is at 1.1075/65. A break below 1.1055 re-tests the 1.1025 low. A break below here is a sell signal targeting 1.1000/1.0995 and important 21-month trendline support at 1.0975/65.
USD/CAD holds support at 1.3260/70 to hit the 1.3300/03 level. Resistance at 1.3330/40 held so well all through August, but is more likely to be broken now. Place stops above 1.3355. A break higher is a buy signal targeting 1.3370, 1.3390 and 1.3420/30.
Try long positions at the support level at 1.3270/60 with stops below 1.3250. A break lower is a sell signal targeting 1.3225/15, perhaps as far as 1.3185/75. Further losses meet good support at 1.3145/40.
Technical Analyst & Trader
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