‘US Dollar index’, a buy ahead of Non-Farm Payroll numbers
Trade Set up – Given the underlying trend, and at this very juncture, we feel it is hard to be short the USD. That said, with traders likely to defend the YTD high at 96.98, we feel waiting for a daily close through this resistance level makes sense as it would be sending a fairly powerful signal that the bullish trend is set to continue.
On this development we would target 98.00, or the 61.80% retracement of the last major high, with stops below 96.30 looking to tighten stops as price moves higher.
Why we like this trade – Price found strong support at the 200-exponential moving average, and used this as a platform to make a renewed assault above 96.00, and clearly the bulls are in control. We can take a look at the oscillators and see no immediate signs of a loss of momentum here, but one would expect momentum to wane into 96.98.
Fundamentally, we see downside risks to the USD if we take our timeframe out a week into next week’s US midterms. However, with a $24B liquidity drain from the Fed’s SoMA portfolio tomorrow (which has historically been a USD positive), and the prospect of a 3%-handle in the wage data, as a feature in the US payrolls report we see the USD supported in the short-term.
A close through the YTD high can only be seen as a bullish sign and we would trade this closing break accordingly.
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
On this development we would target 98.00, or the 61.80% retracement of the last major high, with stops below 96.30 looking to tighten stops as price moves higher.
Why we like this trade – Price found strong support at the 200-exponential moving average, and used this as a platform to make a renewed assault above 96.00, and clearly the bulls are in control. We can take a look at the oscillators and see no immediate signs of a loss of momentum here, but one would expect momentum to wane into 96.98.
Fundamentally, we see downside risks to the USD if we take our timeframe out a week into next week’s US midterms. However, with a $24B liquidity drain from the Fed’s SoMA portfolio tomorrow (which has historically been a USD positive), and the prospect of a 3%-handle in the wage data, as a feature in the US payrolls report we see the USD supported in the short-term.
A close through the YTD high can only be seen as a bullish sign and we would trade this closing break accordingly.
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
Trade closed: stop reached:
Given the strong pull-back in the US dollar overnight our position is closed In line with our trade set-up.
Disclaimer:
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment.
