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Outlook for US dollar pairs ahead of this week’s US NFP

The US Dollar Index signalled a reversal of the bull trend last week with the double-top sell signal. I covered this topic in last week’s article and the dollar pairs weakened again yesterday, to confirm further negative sentiment going forward into this week’s US nonfarm payrolls.

AUD/USD has finally beaten key resistance at 6940/45 for a buy signal targeting minor resistance at 6963/66, 6990/95 and perhaps as far as 7025/30 this week.

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The downside is expected to be limited with minor support at 6955. In the unlikely event that we fall as far as 6945/40, try long positions with stops below 6925.

NZD/USD beat 6550/55 for a buy signal initially targeting minor resistance at 6585/95, which was hit. The outlook turns positive as we test minor resistance at 6585/95 then look for 6610 and 6625/30, perhaps as far as 6640.

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Again the downside should be limited with minor support at 6575. It’s unlikely but if we fall as far as 6560/50, try long positions with stops below 6525.

EUR/USD has held strong resistance at 1.1185/95 extremely well in the days leading up to yesterday and held perfectly again for much of the day. Eventually we broke higher for a strong buy signal, initially targeting 1.1245/50 and strong resistance at 1.1265/75. We topped exactly here but a break above 1.1275 is expected eventually, for a buy signal targeting 1.1320/25 and strong resistance at 1.1365/75.

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We are holding strong resistance at 1.1265/75 as I write so a small pullback is possible to first support at 1.1230/20. I expect the downside to be limited but try long positions at 1.1205/1.1195 with stops below 1.1180.

GBP/USD has a bullish candle in oversold conditions on Friday for a potential buy signal, but the recovery was limited yesterday. The pair really struggled at first resistance at 1.2640/55 but we are holding above now to target 1.2700/05. A break above 1.2715 keeps bulls in control for 1.2745/55.

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Failure to hold first support at 1.2655/40 risks a slide to 1.2610/00 before the low at 1.2570/60 where buyers piled in last week. Watch for a bounce from here again. A break below 1.2550, however, targets 1.2535/25.

Gold beat strong resistance at 1296/98 for a buy signal and closed above 1303 for another buy signal on Friday. We hit all targets as far as 1319/20 yesterday and continued higher to 1327.

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Gold is severely overbought in the short term so a small correction is very possible, but short positions are high-risk. Below 1324 risks a slide to minor support at 1320. Better support at 1316/15 could hold the downside. Long positions need stops below 1312. Look for a buying opportunity at 1309/07.

A break above 1329 is expected eventually this week, targeting 1333 and 1336/37 before a re-test of the high this year at 1346.

Silver bulls are fighting back with the break above 1462/64 for a buy signal targeting 1471/71, 1482/84 and resistance at 1488/90. We should struggle here but shorts are risky. A break higher eventually targets 1497/1500.

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The downside should be limited with first support at 1471/69. If we continue lower look for a buying opportunity at 1463/60, with stops below 1450.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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