USD higher: implications for some FX pairs by Mary McNamara

Tue 19th Aug

The USD continues to rally and is still shaping up in a potentially bullish flag pattern. There is a lot of USD sensitive data this week and this starts tonight with Building Permits and CPI. Positive results here should help to support the USD.

USDX 4hr:


USDX daily:


Traders need to watch the ‘Flag’ trend lines for any bullish breakout as this would suggest continuation. Any continued USD strength should trigger some movement of FX pairs.

TC Signal: A/J: this TC signal was doing ok until just recently:


Other FX: traders need to keep an eye on their trading calendars for relevant data release times. There is an awful lot of high impact data this week.

E/U: increasing USD strength should put pressure on the E/U. Watch for trend line breaks here. The bottom trend line is coming under some pressure as I type:


A/U: this is struggling at the 4hr 200 EMA and a stronger USD will make it hard for the Aussie to keep tracking higher. Bullish stocks are no doubt helping here.


Cable: has been struggling to hold above the key monthly 200 EMA but continued USD strength might make this a challenge. There is a lot of GBP data due out in a couple of hours that might help to ‘make or break’ this trading channel:


Kiwi: is lower today BUT still above the daily support trend line for now:

Kiwi 4hr:


Kiwi daily: The daily chart is starting to look a bit ‘Bear Flag’ like though! Watch for trend line breaks here for guidance.


Loonie: this pair will most likely get some support from a stronger USD ahead of CAD data on Wednesday and Friday. The daily support trend line is still in play here and price is trying to break up and out of the recent trading channel. This is giving the daily chart a bit of a ‘Bull Flag’ appearance. Watch for trend line breaks here:

Loonie 4hr:


Loonie daily: ‘Bull Flag’?


U/J: this is struggling at the major S/R level of the monthly 200 EMA. A break and hold above this level would be bullish and this is the level to watch here:


AUD/NZD daily: watch here for any daily hold above the key S/R level of 1.105. There has been a 4 hr candle close above this resistance but I would prefer to see a daily candle close above this level:


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