Weekly Technical Perspective on DXY, USD/JPY and NZD/USD

In this array we scale-back and take a demeanour during a broader technical design to benefit a bit some-more viewpoint on where we are in trend. Here are a pivotal levels that matter streamer into a open of Feb trade. Review this week’s Strategy Webinar for an in-depth relapse of these setups and more.

DXY Weekly Price Chart

DXY Price Chart - Weekly Timeframe

Notes: The dollar index is contrast a pivotal support operation during 88.26/71 where a 2010 pitch high converges on a 50% retracement of a 2011 advance. Note that simple downslope support also converges on this segment and serve highlights a near-term risk to a broader downtrend. That said, demeanour for insurgency behind adult during final year’s low-week tighten during 91.33 with a crack above 93.89 indispensable to change a medium-term concentration higher.

Bottom line: While a broader opinion stays weighted to a downside, cost is now contrast down-trend support and could extent serve declines in a near-term. A mangle reduce targets a 2011 trendline, now around ~86.60s. Ultimately, from a trade standpoint, I’d be looking to blur a convene aloft into a Feb open towards resistance.

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USD/JPY Weekly Price Chart

USD/JPY Price Chart - Weekly Timeframe

Notes: USD/JPY is entrance a technical support connection during 107.45/84– a segment tangible by a Apr lows, a 2017 low-week tighten and simple trendline support fluctuating off a late-2012 pitch lows. The evident short-bias is during risk near-term while above this threshold with halt insurgency eyed during 110.16.

Bottom line:Although a broader opinion stays weighted to a downside, a decrease could see a teenager stop streamer into a tighten of a month. That said, a miscarry would have us looking for short-entries while next a yearly open during 112.65 with a mangle next support eyeing successive targets during a 61.8% retracement during 106.38 backed by slope support nearby 102.80s.

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USD/JPY IG Client Positioning

USD/JPY IG Client Sentiment

  • A outline of IG Client Sentimentshows traders are net-long USD/JPY- a ratio stands during +2.82 (73.8% of traders are long) – bearishreading
  • Retail has remained net-long given Dec 29th; price has changed 3.6% reduce given then
  • Long positions are 11.5% aloft than yesterday and 9.6% aloft from final week
  • Short positions are 10.9% aloft than yesterday and 16.8% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests USDJPY prices might continue to fall. Traders are serve net-long than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger USDJPY-bearish contrarian trade bias from a view standpoint.

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NZD/USD Weekly Price Chart

NZD/USD Price Chart - Weekly Timeframe

Notes: Kiwi is entrance off a behind of a seven-week allege with cost unwell to tighten above a 78.6% retracement of a 2017 decrease during 7391 final week. I’m looking for a greeting during a long-term 200-week relocating normal during ~7268 with a mangle there indispensable to advise that a some-more poignant near-term high is in place. That said, bullish cancellation rests during a connection of a 52-week relocating normal and slope support fluctuating off a 2015 lows during 7120s.

Bottom line: The pullback is expected to be ephemeral formed on prior instances of 7 week run-ups and a crack aloft from here looks for a widen into pivotal insurgency during 7512/17– a segment tangible by a 50% retracement of a 2014 decline, a 2017 high-week tighten and a top median-line together of a broader forward pitchfork (blue). From a trade standpoint, a evident hazard might be reduce though ultimately, we’ll be looking for long-entries while above a 2015 trendline (red).

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Previous Weekly Technical Perspectives

– Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex hit him during mboutros@dailyfx.com or Click Here to be combined to his email placement list.

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