US Dollar Opens Lower, Holds Negative Tone

US Dollar Opens Lower, Holds Negative Tone

By: Simon Furman | Where To Trade | On:27-10-2014 01:42
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Key Highlights

  • New Zealand dollar manages to find support around the 0.7800 level against the US dollar.
  • There was no major action during the Asian session, as there was hardly any economic release scheduled.
  • Euro opened the week on the positive note against a number of other currencies including the US dollar and the British pound.
  • German IFO business climate index is a major release during the London session which might impact the EURUSD pair to a great extent.
  • Canadian dollar continues to consolidate against the US dollar, but there is a chance of a spike lower in the USDCAD pair.

 

NZDUSD

There is a bullish trend line on the 1 hour chart of the NZDUSD pair, which is acting as a support for the pair and managed to hold the downside on more than three times. The pair is currently trading around the 38.2% fib retracement level of the last drop from the 0.7986 high to 0.7793 low. There is a high probability that the pair might spike higher towards the 50% fib retracement level which is sitting below the 100 and 200 simple moving averages. If the pair climbs higher from the current levels, then it might face resistance for one more leg lower. Overall, the pair holds the bullish tone.

Intraday Support Level – 0.7850

Intraday Resistance Level – 0.7890

  • Overall, as long as the pair stays above the highlighted bullish trend line it can move higher.
  • 100 moving average might act as a strong resistance for the pair.

 

Where To Trade - NZDUSD - 27-10-2014

 

The hourly RSI is well above the 50 mark, which adds value to our bullish view in the short term. So, one might consider buying dips if the pair corrects lower from the current levels.

 

USDCAD

The US dollar continued to find buyers against the Canadian dollar on the dips. There is a trend line on the one hour chart, which is acting as a hurdle for the USDCAD pair sellers. The pair is currently struggling to break the 100 hourly moving average which is acting as a monster hurdle for the US dollar buyers. There is a possibility that the pair might dip from the current levels towards the highlighted trend line where the US dollar buyers might appear for one more leg higher in the coming sessions. There is a bearish sign emerging on the hourly chart i.e. the RSI moving below the 50 level. This might encourage the USDCAD pair sellers for more downside in the short term. We need to see how the pair reacts around the 1.1150 level if it moves lower.

Intraday Support Level – 1.1150

Intraday Resistance Level – 1.1240

  • Selling rallies around the 100 MA is a good option.
  • A break above would invalidate the bearish view in the near term.

 

Where To Trade - USD/CAD - 27-10-2014

 

On the downside, the 1.1195 level is also an important support area, as it has held the downside in the pair on numerous times. The US pending home sales data which will be released later during the NY session might cause some moves in the pair.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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