Over the weekend, the US Dollar Index (DXY) continued its rally as price made a push to 91.00. This key level may be used as a resistance, so traders are advised to focus on the minors until more information is available.
One minor that may provide easy profits is EURNZD. This pair has been in a downtrend since November of 2020. Price has continued to make new lows on the daily timeframe. Price action traders are waiting for the price to break and close below last week’s low before entering short. A viable target is monthly support established back in 2018.
Another pair that traders can look to trade is CADJPY. This pair has been in a downtrend since 2018 on the monthly time frame. Last week, the price was able to break outside of this long-term trend and is showing signs of a possible rally. Traders should wait for the price to close bullish above last week’s high before entering long. After which, traders should seek the previous lower highs of the downtrend as take profit levels.
The direction and bias of the US Dollar Index will become more clear tomorrow morning during the New York session. The higher time frame still shows the downtrend is intact, although moves on the smaller time frame are close to invalidating it. Later in the week, Powell will be giving a speech on the current economic outlook of the US economy. This speech should also give clarity to the fundamental aspect of the Dollar.
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- Read yesterday’s breakdown: USD Mixed NFP Reaction + NZDCAD At Key Level
