U.S. Dollar continues edging lower on disappointing GDP data – trade setups for January 29, 2017

Outlook for U.S. Dollar remains bearish as it continues to face economic and political risks.

Summary of recent events:

  • U.S. annualized GDP grew at a pace of 1.9% disappointing the 2.2% expectations
  • Slower economic growth sets implications for 2017 rate hike expectations
  • Trump’s immigration ban poses further market risks as corporate attempts to bring employees home

Trading for the week ahead focuses more on short-term technical setups due to the amount of economic releases affecting volatility uncertainty.

Two setups I outlined in my last post on Friday have already started to take off following today’s market open.

screenshot-at-jan-29-21-20-23_eurusd
EURUSD 1-Hour

Nearing the end of week market close last Friday, I listed two slightly overlapping demand zones for expected price turnaround. This took later in the day on Friday and continued upon today’s market open. Unfortunately, it is too late to act on this trade setup.

screenshot-at-jan-29-21-20-53_usdjpy
USDJPY 1-Hour

Similarly, USDJPY reached its supply zone and held up nicely selling off on today’s market open as traders interpret Trump’s travel ban affecting U.S. visa holders and corporations alike.

Currently, I have taken a short position on the USDCAD pair as it has not sold off nearly as much compared to the USDJPY counterpart. I expect volatility to pick up as we near the New York session open.

screenshot-at-jan-29-21-37-47_usdcad
USDCAD 1-Hour

Similarly, USDCAD tested off the supply zone identified to be earlier last week. Due to the current market session, tick volume is rather low at the moment.

Latest commitment of traders report figures also indicates a speculative position placed on the Canadian Dollar:

cad

For the third week running, large speculators increased Canadian Dollar long positions. This provides decent indication for future price expectancy.

USDCAD is the current trade setup I am following. Stay tuned for future setups.

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