Nadia Simmons: Earlier today, the U.S. dollar moved higher against the euro after worse-than-expected data from Germany. The U.S. currency also appreciated against the Swiss franc and the yen, while the pound erased the gains against the greenback after data showed that British factory orders fell in January. Meanwhile, the U.S. dollar rose to the highest level since September 2009 against its Canadian counterpart as expectations that the Fed will continue to scale back its stimulus program at the next policy meeting on January 29 to USD65 billion, from the current USD75 billion, weighed on the exchange rate. What impact did these moves have on major currency pairs? If you want to know our take on this question, we invite you to read our today’s Forex Trading Alert.
Forex Trading Positions – Summary:
- EUR/USD: short position (stop-loss level: 1.3699)
- GBP/USD: short position (stop-loss level: 1.6515)
- USD/JPY: none
- USD/CAD: none
- USD/CHF: long position (stop-loss level: 0.8985)
- AUD/USD: none
On the above charts, we see that despite yesterday’s increase, the situation hasn’t changed much as EUR/USD still remains below the previously-broken lower border of the consolidation range (marked in blue) and the medium-term support/resistance line.
As you see on the daily chart, the proximity to these levels encouraged sellers to act, which triggered a downswing that took EUR/USD to the 61.8% Fibonacci retracement level once again. If this support level encourages buyers, we may see another attempt to come back above the lower border of the consolidation range. However, if it is broken, we will likely see further deterioration and the first downside target will be around 1.3457 (this level intersects with the 38.2% Fibonacci retracement level based on the entire March-December rally).
Please note that as long as the pair doesn’t invalidate the breakdowns below lower border of the consolidation range and medium-term support/resistance line, further deterioration is likely to be seen. Additionally, a bearish engulfing pattern created by Thursday’s and Friday’s candlesticks pattern still supports sellers.
Very short-term outlook: bearish Short-term outlook: bearish MT outlook: mixed with bearish bias LT outlook: bearish
Trading position (short-term): short. The stop-loss level for this position is at 1.3699. The first downside price target is around 1.3457. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.(...)Click here to continue reading the original ETFDailyNews.com article: U.S. Dollar Erases Losses Against Major Currencies [PowerShares DB US Dollar Index Bullish, PowerShares DB US Dollar Index Bearish]You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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