News & Analysis
Eightcap Forex technical insights USD – 05/02/18
Friday produced a USD recovery, as employment data and average earnings data beat expectations crashing bonds and stocks. The USD returned to its safe-haven status something we haven’t seen for a while. The USD surged to most currencies with the EUR being the only major that put up some fight. Trend breaks came through on a few pairs, the USDCAD, USDJPY and USDSGD being prime examples. We’ve seen single day surges in the past that have turned out to be nothing more than flashes in the pan.
With all the USD negativity do these have the legs to become something more or are we just seeing future fades developing? Lets take a look at a few in more detail below.
USDCAD – Friday’s session produced a 157 pip rally that broke its medium downtrend. Friday’s close also confirmed a higher low. The current support low is 1.2250. We would like to see this level hold to show buyers still remain in control on the short to medium term. We see two potential resistance levels above and one current level that buyers still need to clear. Technically signs are there but buyers still have work to do to confirm this.
USDJPY – we’re seen more build up to this break of the trend. Buying started on the 31st of January and we saw a 60 pip before Friday’s surge. We would like to see 108.45 hold for buyers. As with the $/Cad a higher low has formed. Price is currently entering a potential supply zone, this could well be the first acid test. Sellers are in control today but today’s candle remains an inside bar. A break of Friday’s open also set’s up a continuation pattern from 110.30. For buyers to be setting a trend change we would like to see a new higher low after this retracement followed by a break of the supply zone.
Good trading from Eightcap
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