Dollar weakness to continue post-nonfarm payrolls
Obviously a lot depends on the nonfarm payrolls release out of the US today, but the charts are telling me there is a strong chance the US dollar will continue lower after we spotted a double top at important 500-day moving average resistance at 95.50/95.55 at the end of last week. The shorts continue to work as the index breaks the trend line support seen in the daily chart seen below. This presents trading opportunities across a host of dollar pairs.
The AUD/USD bounce from just below important longer-term 61.8% Fibonacci support at 7330/25 has triggered a consolidation to ease oversold conditions as it moves to 7360, 7390/95 and the strong resistance at 7425/30. This is the main challenge for bulls today. A break above 7450 targets a selling opportunity at 7495/7505, with stops above 7530.
The downside is expected to be limited with minor support at 7365/60 (we bottomed exactly here yesterday) and a buying opportunity at 7330/20, with stops below 7290. A break lower (and a weekly close below for confirmation) is a sell signal targeting 7260/50 and 7210/00.
NZD/USD bulls are winning as the pair recovers to rise back above the one-year trend line at 6740/35 to prove this was a false break on Monday and the target of 6770/75 was hit.
The next target for buyers is 6820/25 and the strong resistance at 6850/60.
A high for the week is likely so take profit on all longs. Failure to hold above 6770/75 risks a slide to a buying opportunity at 6735/25, with stops below 6680. A sustained break below 6680 (and a weekly close below for confirmation) is a sell signal for the start of next week targeting 6660/50 and 6610/00.
The EUR/USD bullish double bottom holds just above the 550-day and 100-week moving averages at 1.1445/1.1435 for a more positive outlook. Now, through resistance at 1.1680/85, to the next target of 1.1720 and above here today tests strong resistance at 1.1750/60. This is now key to direction. Bulls need a weekly close above here for another buy signal at the start of next week targeting 1.179/1.1800, 1.1820 and the June high of 1.1840/50.
Failure to beat 1.1720 targets 1.1680/70 (currently holding) then better support at 1.1640/30. Downside is expected to be limited but below here look for 1.1585/90. Further losses meet support at 1.1530/10.
A USD/CAD double top at the longer term 50% Fibonacci resistance triggered losses last week. This week the pair trades sideways and is in a consolidation phase. With no buy signals, the outlook remains negative. Further losses look likely, eventually targeting strong support at 1.3060/50. A short-term bounce from here is expected, but a weekly close below is another sell signal for the start of next week targeting 1.3010/00 with very strong support at 1.2985/75 for profit taking on all remaining shorts.
Gains are likely to be limited, with resistance at 1.3165/75, but stronger resistance at 1.3210/20 is key to direction. Above 1.3240, however, targets 1.3275/80.
GBP/USD longs are looking at important 500-day and 100-week moving average support at 1.3075/70 which are working perfectly as we reach the next target of 1.3250/60. The outlook remains positive, with further gains targeting 1.3290 and the two-week high at 1.3310/14.
Downside is expected to be limited, with minor support at 1.3180/70 and 1.3140/30, but with obvious hugely important support at 1.3075/70; stops below 1.3030. A break lower (and weekly close below for confirmation) is a sell signal targeting 1.2995/85 and 1.2920/10.
Gold has bottomed exactly at an important two-and-a-half-year trend line support level at 1240/38, and is also holding just above the important 200-week moving average at 1234/33.
The expected bounce hit all our targets as far as 1255/56 and 1260/61. We topped exactly here, but I think this is just a consolidation before another leg higher. Further gains are expected, eventually to 1265 and resistance at 1267/69. Strong resistance at 1272/74 is more of a challenge so we’ll take all remaining profits here.
Failure to hold above 1253 risks a slide to 1247/45. Downside is expected to be limited but obviously try longs at 1240/38 with stops below 1230.
WTI crude has rejected important six-month trend line resistance at 7500/7510 in overbought conditions. We bottomed exactly at the first short-term 23.6% Fibonacci support level at 7250. The outlook remains negative so gains are likely to be limited, with first resistance at 7350/60.
Watch for a high for the day. If we continue higher we could target 7420/30, but of course look for a selling opportunity at 7480/7520. A sustained break above 7550 (and a weekly close above for confirmation) is a buy signal.
Eventually we are likely to break short-term 23.6% Fibonacci support at 7250. Below 7215 targets 7160/50 and perhaps as far as minor support at 7090/80. (Do not buy longs here!) A break below 7050 then targets 7025, 6990 and support at 6955/45.
Technical Analyst & Trader
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