In our Daily Trade Watch, we take a look at some high probability trade setups that we look to trade over the course of the day. Today, we will be taking a strong look at the turnaround in USD price action.
Positive USD Sentiment
Yesterday, we saw some mixed signals coming from the USD. However, these mixed signals have now subsided. This is due to the Federal Reserve Chairman, Jerome Powell, giving his testimony on the Semiannual Monetary Policy Report. The market seems to interpret this testimony as a fairly positive assessment of the US economy.
As a result, we are seeing the USD strengthen across the board. Therefore, we have identified a number of high probability opportunities in many of the dollar pairs. Additionally, there are a number of opportunities in relevant correlated markets.
EURUSD
We will start with the EURUSD. After yesterday’s bearish engulfing candlestick, a break below yesterday’s low of 1.1649 is the first opportunity. There may be a continued opportunity to sell below this level when the opportunity presents itself. It is a similar situation across the board. We are not suggesting that we are going to trade a large number of dollar pairs at the same time. What we can focus on is the best opportunities across a number of correlated pairs.
Also, it is worth noting that these high probability opportunities are likely to present themselves at different times during the trading day. Certainly, exercise patience and of course a strong approach to risk management.
Other Trades
The other important levels we are looking at across the other markets include:
- Selling GBPUSD below major support at 1.3050.
- Potentially buying USDJPY above yesterday’s high of 112.92.
- Buying USDCAD above the structural high of 1.3216.
- Selling AUDUSD below yesterday’s low of 0.7375.
- Selling GOLD below yesterday’s low of 1226.32.
Overall, these potential opportunities give us the directional bias and the key price levels to make our trading decisions. These decisions are made off the back of a number of interesting opportunities in the markets that will unfold throughout the day.
USD Price Action After Powell Testimony – Full Analysis
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