The US dollar has climbed a lot during the last couple of sessions against few major currencies, including the Japanese yen. However, the pair is heading towards an important resistance area, which might act as a hurdle for the dollar buyers. So, selling rallies in the short term could be a great call considering the current market situation.
There is a bearish trend line forming on the 4 hour chart for the USDJPY pair. There are several important resistance levels around the 101.80-90 area, which are also coinciding with the mentioned trend line. So, if the pair trades a bit higher from the current levels and closer to the mentioned area, makes a stop and forms a bearish candle pattern, then we can jump into a sell trade. Remember, the pair should respect the highlighted trend line in order for this trade setup to be valid.
Initial target should be around the 101.60 level, and final target could be around the 101.40 level. Stop should be above the 102.05 level.
Reviewing yesterday’s events and trades
Yesterday, the US dollar climbed sharply against most of the major currencies, including the Euro, the Australian dollar and the Swiss franc. The EURUSD pair traded lower and broke the 1.3580 support level during the speech of the Fed’s Janet Yellen. The biggest loser is the NZDUSD pair, as softer than expected inflation numbers caused a sharp downside in the pair. The NZDUSD pair is currently trading below the 0.8700 support level. The AUDUSD pair was also seen trading lower Intraday.
Fundamental Outlook for the day
Today, the Bank of Canada will be announcing the interest rates, which can affect the Canadian dollar in the short term. The central bank is expected to keep the interest rates unchanged at 1%. Moreover, the US PPI data, industrial production data and the Fed’ beige book will be released. All these events are likely to cause swing moves in the US dollar. Later during the next Asian session, the National Australia Bank (NAB) Quarterly Business Confidence Index will be released, which might affect the AUDUSD pair in the short term.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, NZDUSD, AUDUSD, EURNZD, GBPNZD and SILVER.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
