Forex Trading Insights: Monitoring Critical Dollar Levels Into High-Impact News 2-2-24

Introduction

Key Areas to Watch for the US Dollar

  • 103 support level is critical for dollar index
  • If 103 support breaks, dollar could continue falling
  • 147 support is important for UJ/USDJPY
  • UJ could fall to 145 wildcard support if 147 breaks

Average Hourly Earnings and Nonfarm Payrolls Impact

  • January Average Hourly Earnings Month-over-Month and Nonfarm Payrolls forecasts are bearish for dollar
  • Average Hourly Earnings Year-over-Year forecast is neutral

Technical Analysis of Dollar Pairs

  • Dollar Index (DXY)
    • Getting rejected at 103.75 resistance
    • Needs to reclaim 103.25 support to stay bullish
  • USD/CAD
    • Failing at downward sloping trendline resistance
    • Key support around 1.3280 area on monthly chart
  • USD/JPY
    • Old support around 147 becoming new resistance
    • Bullish if 147 support holds, bearish if it breaks

Trading Strategies

  • Sell dollar pairs on breakdown below supports
    • Short DXY, UJ, UC if supports break
  • Buy dollar pairs on bounce from supports
    • Go long GU, EU, AU, NU as dollar drops

Conclusion

  • Critical juncture for dollar pairs with upcoming news event
  • Outlook depends on reaction at key support levels
  • Be ready to trade bullish/bearish based on direction after news

Forex Trading Pro Matt discusses the critical technical levels to watch on the US dollar and yen pairs going into high impact news events. He analyzes how key support at 103 on the dollar index, as well as 147 support on USD/JPY, need to hold to remain bullish.

With upcoming average hourly earnings and nonfarm payrolls data expected to be bearish for the dollar, he prepares traders to watch the reaction at support levels. If support breaks, he advocates shorting the dollar and yen pairs.

However, bounces could signal buys on Euro, Pound, Aussie and NZ instead. Using technical analysis, he identifies resistance failing on dollar/CAD and dollar/yen to plot potential breakdowns. Having predefined the range, he watches to see if prices reject at the range extremes.

With the dollar at a critical technical juncture, he stresses the importance of planning directional trades around the news event.

Related Articles

Stocks & Options For Breakfast | Bull Market Breakouts

Stocks  Long stock ideas Financials (BAC, GS) with potential for pullbacks but overall bullish  Healthcare (BHVN, JNJ) showing relative strength  Technology (DOCS) early uptrend Short stock ideas Basic materials (AEM, STLD) clearly bearish sector Energy (XOM, CVX) at support levels but potential to go lower  Risk management Position sizing critical in volatile markets  Use stop…

Final Thoughts: The Future of Stock Markets and Trading

Navigating the Waves: A Journey Through the History of the Stock Market, Investing, and Trading Key Takeaways: AI and robotics are not just replacing traditional jobs, but also creating new ones, altering the future of work. Nanotechnology is causing significant advancements in sectors like healthcare and environmental conservation. Biotechnology brings potential medical breakthroughs but also…

The Impact of COVID-19 on the Stock Market: A Comparative Analysis of Pre and Post Pandemic Eras

Key Takeaways: The pre-COVID-19 era was marked by a robust global economy and stock market performance. The pandemic triggered dramatic market sell-offs and historic drops, leading to fear-driven investor behavior. Government interventions and central bank measures aimed to stabilize economies and markets. The post-COVID-19 era saw gradual market recovery and shifts in investor preferences, favoring…

Options Trading Q&A

0:00 – 6:36 Identifying the Market6:36 – 8:10 Great Idea, Not Expressed Right8:11 – 10:37 Implied Volatility10:39 – 11:38 Credit side11:39 – 15:53 Call Options Off the Bottom15:54 – 21:40 Risk to Reward Ratio (Aarons Question)21:42 – 25:40 Diagonal vs Vertical Spreads25:41 – 34:36 Difference of Equity Traders and Options Trader34:37 – 37:15 Biggest Mistakes with Fast Moving…

Responses

Your email address will not be published. Required fields are marked *