Forex Video Briefing (7/2) – USDX, USD/JPY, EUR/SUD
The USDX has been declining in June since tagging 81.00. It is stalling to start July, at 79.75. After the ADP jobs data, traders are buying up the USD, in anticipation to tomorrow’s NFP data, which has always had a much larger impact than the ADP reading had. The falling trendline from June will be the key factor to watch for tomorrow. If traders can pop up above the TL, a bullish reversal is in the cards for the USD. Otherwise, the USD remains bearish, and traders could be looking for a sell on a rally, especially if the NFP is only in-line with estimates or even lower. A reading below 200K should be a major blow and the USDX should then challenge this week’s low so far at 79.75.
The USD/JPY should remind you very much of the USDX. It is also rallying after a bearish market in June. The 101.90 area will be key in the 4H chart. We should see resistance here if the USD/JPY is to maintain a bearish outlook in the short-term. However, a break above 102 neutralizes June’s bearish outlook, and puts the USD/JPY right back above the middle of 2014’s consolidation range roughly between 104 and 100.76.
The EUR has been a wounded currency this year as the ECB continues to consider stimulus. However traders seem to have formed a price bottom in June. Last week, we saw the EUR/USD break above the 1.3676 level, which was the previous June high. This week so far the pair is in a pullback after failing to breach 1.37. The 1.3620 area will be key support, reinforced by a rising trendline. A break below 1.36 however, along with the RSI break below 40 in the 4H chart, would suggest bearish continuation. The EUR/USD will also be effected by the ECB meeting before the US NFP. These two event risks are likely going to shake up the EUR/USD, and we will have to see how the market reacts to the rising trendline. If after all is said and done, and the EUR/USD holds north of 1.36, then we should anticipate further EUR/USD bullishness going into next week