Dollar In Correction Phase, Aussie Shaping Up For Gains

Dollar In Correction Phase, Aussie Shaping Up For Gains

By: Oliver Miller | Where To Trade | On:31-10-2014 04:02
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Key Highlights

  • US dollar continued to move lower against the Euro and Aussie dollar as it looks like that a correction phase is underway.
  • New Zealand dollar traded lower as the New Zealand Building Permits released by the Statistics New Zealand came as a disappointment with a decline of 12.2%.
  • Japanese National Consumer Price Index released by the Statistics Bureau missed the expectation and declined from 3.3% to 3.2%.
  • Yen pairs were seen trading higher after the Japanese release as the market was not keen buying the yen in the short term.
  • GfK Group Consumer Confidence decline from -1 to -2 and was in line with the expectation. GBPUSD traded a touch lower after the release.

 

USDJPY

The US dollar traded lower against most major currencies, but the Japanese yen was also one of the losers as it was seen trading lower Intraday. The USDJPY pair has formed a triangle on the hourly chart which can be seen as a breakout pattern. The pair recently tested the upper trend line of the triangle, failed to break it and currently moving lower. There is a chance that the pair correct towards the 50% fib retracement level of the last leg from the 108.75 low to 109.42 high. The US dollar buyers might appear around the mentioned fib level to develop buying interest again in the near term.

Intraday Support Level – 109.10

Intraday Resistance Level – 109.50

  • Overall, as long as the pair stays above the 109.10 level if might head higher.
  • Next level of selling interest can be seen around the 109.50-70 area.

 

Where To Trade - USDJPY - 31-10-2014

 

If the pair manages to clear the last high of 109.42, then it would ignite more gains in the pair which might take it towards the 109.70 area where the US dollar sellers could reappear.

 

EURAUD

The Euro was comparatively weaker Intraday, as it moved lower against the Australian dollar. The EURAUD pair broke an important trend line on the hourly chart which acted as a support on a number of occasions. This break can be seen as crucial, as the EURAUD pair might continue trading lower in the coming sessions. If the pair corrects a bit higher from the current levels, then it might find resistance around the broken trend line. So, the 1.4300 area is a critical hurdle for the Euro buyers in the short term. The chance of a break back above the trend line is less, but if the Euro buyers take control then the EURAUD pair could retest 1.4340 moving ahead.

Intraday Support Level – 1.4244

Intraday Resistance Level – 1.4300

  • Selling rallies around the broken trend line looks fine in the near term.
  • A break below the last low would call for more losses in the pair.

 

Where To Trade - EURAUD - 31-10.2014

 

The next level of downside interest below the 1.4244 level would be around the 1.4210 area where there is a possibility that sellers might struggle. We need to see how the pair reacts around the last low if tested again.

Oliver Miller

Oliver Miller

"Patience is the key for success"

Oliver Miller is one of the best financial analyst with 18 years of online trading experience

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