The U.S. Dollar made a slight recovery today as President Donald Trump continues to sign executive orders with the promise of fiscal stimulus looking likely.
Earlier today, Trump proposed a 20% tax on goods from Mexico in order to generate revenues to build a wall. Currently, markets remain on the quiet end awaiting Friday’s annualized GDP figures.
Current trade setups being monitored continue to predict a bearish outlook for the U.S. Dollar. After the quick rally, the market has found its rest zone and the following levels are being tested for possible dollar reversion.
EURUSD retested a daily high before selling off and breaking below our previous 1.072~ neckline. Given a one to one magnitude movement, selling pressure has died down near the end of the New York session and has remained quiet since the start of the Sydney session. Price was quick to enter the December demand zone and quickly react with expectations for a further bullish move as volatility picks.
Similarly, AUDUSD broke above a daily high and did not experience much volatility. Currently two demand levels along with the daily high level plotted for potential long entries as this pair experiences a slow sell-off from short term speculation and long entry close-outs.
Not much going on with GBPUSD other than the divergence indication over on the daily time frame. This signals a possible long term bullish outlook. For the time being, technical setups will be observed as volatility picks up closer to the end of the Tokyo session and closer to the London open.
Finally, USDCAD makes a pull back as short sellers close out their position. Nevertheless, three potential supply zones have been drawn to source out future selling pressure. These supply zone also sets up a trading plan for tomorrow’s GDP release. If price breaks above the 1.316~ level, I would be looking to go long for a quick scalp on news release.