The calm before the storm, that is the storm of fundamental events that will be taking place tomorrow. The DXY could go either way, and traders have options in terms of trade setups.
Currently, the DXY is resting at this week’s low of 90.40. Price has started to consolidate as traders and investors look to tomorrow’s fundamental onslaught to provide more information. A break of this level could activate shorts for USDCAD. Price action traders shorted USDCAD earlier for a gain of up to +35 pips before the price retraced. Traders can seek an entry short once again, after both the DXY and USDCAD clear their respective lows.
On the flip side, if the DXY can push higher from 90.40, traders may have a possible short for NZDUSD. Since the first week of January, the pair has begun a steep downtrend. Price has currently stalled at this past December low. Price action traders will be looking for a bearish break and closure below this level to take a short.
Biden’s inauguration, Bank of Canada monetary policy, Bank of Japan monetary policy, and Australian unemployment data are just some of the key events that will take place tomorrow. Ideally, traders should look to be out of their trades before the New York open. After which, volatility and unexpectedness will increase substantially.
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- Read yesterday’s breakdown: Dollar Fails to Hit 91.00 + Weekly Fundamental Outlook
