Key Forex Levels
Bo Harvey
will be writing in place of Dave today.
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To
continue the focus on FX, the last week or two has seen the
high-yielding currencies outperform during the dollar bounce. For example, the
AUD, NZD, and GBP have held up much better than the EUR against the dollar and
the best trades have been in crosses that have taken advantage of EUR weakness
against these higher-yielding currencies. For example, the EUR/AUD, EUR/GBP,
and EUR/CAD have all been pushing strongly lower on the heels of Euro weakness.Â
My suspicion is that as talk of a potential ECB rate cut gathers steam, these
crosses will continue to offer decent setups in the direction of the trend.  Â
As for key levels, the USD/JPY
shot back across 105 last week, but faces resistance at the 106.70-107.00 zone,
which includes the 50 day EMA as well as the 38% retracement of the daily swing
move down.Â
The EUR/USD bounced off the
1.1980-1.2040 support zone outlined last week, and is now hanging by a thread
just above it. Daily stochastics have turned down, and if there is a break of
this zone, it would suggest a continuation move lower, with an initial target of
1.1850.
Although the GBP and EUR/JPY
are still well away from the trigger levels I outlined last week, I continue to
keep an eye on them as the longer-term setups are still valid.   Â
Have a great trading week, and
feel free as always to contact me with any questions or comments,
Bo Harvey