The Dollar Stays Put as NFP Approaches
There is a great argument for the fact that today looks much like yesterday in the markets, especially pertaining to the U.S. Dollar. As we approach Friday however the range-bound activity at least has good cause to be that way. With NFP approaching there will be few dramatic moves (barring unforeseen geo-political events) that will encourage traders to want to step out in front of the NFP. The only significant number that remains before Friday’s NFP is tomorrow’s ADP number — and that seems to be effecting the markets increasingly less and for a shorter term of time. Let’s take a look at some other charts outside the USD this morning.
The EUR/USD has certainly enjoyed a ride higher but as prices approach the 1.3400 psychological level, there is more than enough resistance to slow prices from moving higher. Add to that the U.S. Dollar would have to continue lower, most likely down past 82.80 to move the Euro higher and we have a stalemate. While the Euro was able to pierce “00” it did little afterwards to establish support at that height. I am certainly not saying 3400 is impenetrable, but rather keep an eye on the U.S. Dollar was significant weakness below 83.00. I am not at all opposed to a pullback, swing enter here if prices head back to the 3300 level to the top line of the Wave as a definite 12 to 2 o’clock Wave is established on the daily chart.
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For the same reasons that I would prefer the pullback buy on the daily, is the same reason I am not wild about the potential breakout on the 60 minute chart above. The breakout would be just a pip or two above the 3380 level and this leaves prices very little room to run before reaching the “00” — or rather the 3395 pip level where the first profit target would be waiting.
Since we are talking about the U.S. Dollar and the EUR/USD, now would be a great time to bring up the USD/CHF. The Swissy has been weak on the daily chart mirroring the USD. The Wave is a shallower 4 to 6 o’clock but certainly within swing parameters. The follow-through would be be tricky here as this trade would necessitate the USD moving lower as well and chances are it will not do so significantly so close Friday’s NFP.
And don’t forget, since the U.S. Dollar remains in the range it established earlier this morning, there is little follow through on the Dollar-correlated majors this morning. However this chart of the Swissy shows a nice consolidation and while prices are still trading within the wider section of the triangle, both uptrend and downtrend line breaks would be outside the “00”.
Raghee Horner is a trader with more than 15 years’ experience in the markets. Ms. Horner has taught her brand of technical analysis and charting strategies to students all over the world. Emphasizing charting and price action and continues to teach the tools and strategies that encourage self-directed traders to pursue the study of chart analysis and market psychology. She is a much sought after public speaker who has conducted seminars in the US, Canada, the Caribbean, and Asia. Raghee’s charts are created using eSignal and EZ2 Trade Software. https://www.ez2tradesoftware.com