U.S. Dollar sell-off slows down and key price levels to monitor

Last week and earlier this week, several pairs, most notably EURUSD and AUDUSD, made significant rallies breaking above a key shared daily and weekly resistance level.

As the market is currently stalling for the time being, here are the key levels and setups I will be watching for the remaining of this week and next.

EURUSD: Break above key weekly level

Over on the weekly time-frame, the weekly level that I have been monitoring for the longest time finally broke above. As mentioned in my earlier posts, I took two trades capturing two shorter term rallies in the overall move. Given how strong this breakout looks, I expect this break-out to be legitimate and will hold up for the weeks ahead.

Over on the hourly time-frame, I’d be looking for another potential retracement before getting into another long entry. I expect there will be a sell-off Friday (tomorrow) when market nears close as traders unload their long positions before the weekend. On Sunday’s open, I would look to take a long entry to hold for, hopefully, the entire week ahead.

AUDUSD: Break above key weekly level

Over on the weekly time-frame, we see a similar key level being breached. Price failed to break lower lows signalling a failure of the long term downtrend. Similarly to the EURUSD pair, I also took two long entries on the AUDUSD pair. Currently, I am waiting for a retracement before taking another entry.

Over on the hourly time-frame, I am actually a bit late to the scene. The area circled would’ve been an optimized entry zone, which I missed. Similarly, I would look to a Friday sell-off preferably from position close-outs.

USDJPY: Remains bearish as breaching below another key level

The circled objects marks key areas where this level has been tested and held up. Several weeks ago, I used this level to take a bullish stance on this pair. This was back in mid-June where the U.S. Dollar was incredibly bullish. If this level is successfully breached lower, I would definitely be looking to short this on a lower time-frame.

Took this trade based on the hourly time-frame. The daily level is holding up, but I have also marked a higher hourly time-frame. My stop loss is just above that hourly level.

USDCHF: Breaks below key daily level

The reverse is true for the USDCHF pair where we observe the first sign of a break below the weekly and daily level. Given how choppy this pair is, I changed this to a 3-day time-frame. I do not intent on entering a short position here especially given how much whipsaw exists on this pair.

NZDUSD: Two daily levels breached

This is another trade I’m currently looking to make a play on. As you can see, it broke above two daily levels marking potential resistance areas. You could even go up to the weekly time-frame and observe a break-out there as well. For now, I would also be looking for a retracement before making a long-term buy and hold play on this pair.

Given the strong correlation between the AUDUSD and NZDUSD pair, we should expect to see these two move in similar fashion for the weeks ahead.

Over on the hourly time-frame, I would be looking at a long entry at the level marked indicating a relative high. For the moment, I will be waiting this out.

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