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What’s in store for the US dollar after the midterms?

Jason Sen

The US Dollar Index has weakened slightly in the wake of the US midterms. What can we expect from here?

For USD/CAD the best support today is probably at 1.3075/70. However, a move below 1.3050 would risk a slide to 1.3035 and 1.3015/10, before strong support at 1.2955/45. Long positions need stops below 1.2915.

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Holding above 1.3120 re-targets 1.3150/60. Above 1.3175 look for 1.3200/05 and the September high at 1.3220/25.

AUD/USD meets a selling opportunity at 7265/75 this week, with stops above 7300. A break higher is a buy signal and a move above the September high of 7315 targets 7333/35 then minor resistance at 7346/50. On further gains look for 7360/63 and 7378/82.

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Failure to beat the only resistance of importance today at 7265/75 targets 7240 and 7220/15 before support at 7180/70 for profit-taking on any shorts. A break below 7155, however, risks a slide to 7125/20.

If NZD/USD holds above 6710/00 we target 6760 and 6790/99. On further gains look for 6730/35 and some resistance at 6750/60.

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Holding below 6690 risks a slide to good support at 6660/50 and the best chance of a low for the day. Any long positions, however, need stops below 6625.

USD/JPY has key support at 113.00/122.90 but long positions need stops below 112.75. Below here we risk a slide to minor support at 112.60/55 and 112.20/10.

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Holding above 113.40 signals further gains this week to minor resistance at 113.55/60 and 113.90/95. A move above 114.10 targets the October high at 114.50/55.

The EUR/USD outlook is more positive if we hold above 1.1420/25, with only minor resistance at 1.1450/60. Strong resistance at 1.1500/10 is certainly more of a challenge. Further strong resistance at 115.30/40 could see a high for the day if tested.

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The first support is at 1.1420/25 but a move below 1.1400 is less positive, targeting 1.1375/70 then 1.1345/40 before important support at 1.1310/00. But this is much less likely to hold another test.

GBP/USD is making a break above 1.3120/30 to target 1.3180/90. On further gains look for 1.3235 and the October high at 1.3255/58, then the September high at 1.3290/97.

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Holding below 1.3100, however, risks a slide to 1.3065/55. A fall below 1.3035 would meet very minor support at 1.3000/1.2990.

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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