USD
Continued
hawkish sentiment from the Federal Reserve favours a stronger greenback. This
sentiment may be provided by the fact that the Quarterly Senior
Loan Officer Opinion survey observed an increased demand for loans during
the second quarter of 2016 and the most recent poll indicates that there was
little change to this fact going into the third quarter. Weaker than expected NFP’s was not enough to
curb the ongoing dollar rally and offers a timid correction that may provide
the ideal opportunity to buy dollars on weakness. Technically a pull-back to
the 12 060 level before the dollar rally continues as the 8-EMA bounces of
the 21-MA as seen on the following 4-Hour chart (FXCM Dollar Index). The
dollar rally is likely to continue up to the upcoming elections in November.
AUD/USD
With
unchanged rates by the Reserve Bank of Australia, positive Australian economic
sentiment of increased retail sales and increased exports from the past week was
not enough to overcome the dollar rally. Technically; a cross-over of the 8-EMA
and 89-EMA is expected as the effects of the last decrease of rates sets in (expansionary
policy).
Upcoming trade:
Entry to short @ 0.7600 with a T/P order @ 0.7410 and S/L @ 0.7662 (3:1
risk-reward).
USD/CAD
The recent OPEC agreement to limit production supply
of crude oil had the benefit of lifting the oil price, and may provide for a
short term rally of the Canadian Dollar as the greenback corrects, however the
longer term target is to the upside as the dollar continues to rally.
Technically this provides the opportunity for two upcoming trades in the near
future.
1st
Trade: Entry to short @ 1.3280
with T/P @ 1.3160 and S/L @ 1.3320 (3:1 risk-reward).
2nd
Trade: Entry to long @ 1.3150
with T/P @ 1.3400 and S/L @ 1.3070 (3:1 risk-reward).
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