U.S. Dollar continues to remain bearish after disappointing Non-Farm Payrolls

Friday’s Non-Farm Payroll figures increased 138k, less than the expected of 181k. Traders are concerned that the labor market is losing momentum as the Feds continue to pursue rate hikes.

Meanwhile, the U.S. unemployment rate dropped to 4.3%. Although this might seem like a positive bit of news, it is actually quite alarming given that 429k people dropped out of the labor force.  Nevertheless, daily and 4-hour  technical setups continue to point to a weaker U.S. Dollar for the weeks ahead. My shorter term trade setups will focus on 1-hour and 30-minute entries.

EURUSD 1-Day

Over on the daily time-frame, the EURUSD pair continues to remain bullish. It broke through and held supported on another daily level denoted at the 1.085~ mark. The next major level we would be keeping our eye on is the 1.145~ zone marking an extra strong point of resistance.

EURUSD 1-Week

The 1.145~ level I plotted is an additionally strong candle because it resides on the weekly chart. This would provide a reference to my short-term targets.

AUDUSD 12-Hour

The AUDUSD signal sold off quite nicely following the failure to break through the daily resistance zone. However, Friday’s disappointing Non-Farm Payrolls and mixed unemployment rate figure caused a sell-off in the U.S. Dollar. I still retain a bearish stance on this pair until it manages to cross above that daily level.

GPBUSD 1-Day

GBPUSD still remain supported on the daily time-frame. This is partially given the sell-off on the U.S. Dollar. Nevertheless, I would consider this to be still a weak daily uptrend. I would have no doubts to keep scaling in a long position on tonight’s market open.

GBPUSD 1-Hour

One concern I have is the price action of this pair. As of the moment, it is in a consolidated range. The pattern is very interesting because it shows a bullish move up to the resistance before a gradual sell-off. With each sell-off, this pair makes another bullish movement. It appears as is someone is loading on huge positions, but the after math is a gradual sell-off. Given that each sell-off has less of an impact (dropping less), I would consider it is fairly certain that the selling pressure is dying down.

USDJPY 1-Day

Meanwhile, the USDJPY pair looks incredibly bearish. However, the huge bearish bar on Friday’s close must be discounted given that it was fundamentally driven. I think today is key especially if this pair has a gap up open. What I would be looking for is how quickly this pair fills up that gap and if it continues selling off. If this pair does indeed gap up, I want to see it filling the gap and continue lower as a strong bearish signal. Similarly, I want to see this pair failing to fill a gap down to generate a bearish signal. I would consider getting in on a short position on tonight’s open at 5pm New York time.

USDJPY 30-Minute

Looking over at the shorter term time-frame, this is the key zone I’m watching to see if it will be broken. On Friday, we’ve experienced huge selling pressure so today is really the day to see if we will get a continuation selling pressure.

USDCAD 4-Hour

The levels on the USDCAD pair remain clean enough to jump directly to the 4-hour time frame. Currently, we have a bit of mixed signals going on right now. The shorter term indicates an uptrend, while the longer term indicates a downtrend. After the last major sell-off on May 24, this pair has been climbing back recovering its losses until reaching the origin of the price level at the 1.335~ mark selling off again.

EURJPY 1-Day

This pair remains one to monitor at the moment. I would not be looking to take any trades on this pair given that it’s consolidating on the daily time frame. After breaking above the daily resistance, another resistance level formed shortly after. Hopefully we will see a break-out in either direction for the week ahead. Another way to use this pair is for trading the EURUSD and USDJPY pairs. We’ve established that the U.S. Dollar is expected to be weaker for the week to come. The direction that EURJPY takes will be a good indication of the relative strength between the Euro and Yen.

These are the current long-term setups I’m monitoring at the moment for my usual trades entered on the 30-minute to hourly time-frame. Stay tuned for updates once we get a better idea once market opens.

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