Apr 06 2021 0
USD fell confusingly despite positive economic data. This has brought about notable changes on currency pairs.
- The USD had its best quarter against major currencies for almost 3 years at the end of Q1, thanks to economic improvements and rising bond yields.
- The latest PMI data continues to show a strong US economic recovery, going above 60 and significantly above expectations.
- USD short positions in the currency markets have also fallen to their lowest levels since June of last year, according to Commodity Futures Commission data showed last week.
- Oil declined in the opening session of the week as increased supply from OPEC + and higher Iranian output offset signs of strong economic recovery in the United States and expect an increase in demand in 2021.
Prices fell sharply in the first session of the week. The bullish flag pattern we were waiting for has not been completed. Instead, the price follows the second scenario, falling to the lower boundary of the upside channel. We are waiting to buy around this 109.5 - 110 zone. However, the market is in a state of heavy buying, so it is not excluded that the price will correct deeply. Only consider entering buy orders when there is a clear bullish signal, especially on the daily frame. As for the current selling pressure, prices may continue to decline.
There has been a significant change on the EURUSD chart. The bearish signals did not appear around 1.18 as expected. Instead it was a breakout. New sell orders have not been triggered yet and old orders have been stopped out. Significant signs of current change: Price broke the short-term downtrend channel and returned to the medium-term downtrend channel, forming an inverse Head and Shoulders reversal pattern. In summary, with the above changes, downtrend traders should suspend trading for this time. Current market conditions are suitable for reversal traders. The closest price target is the zone 1.19.
The price has approached the area of 1.39, re-testing the broken uptrend line before, causing prospective sell orders to be negative. The downside channel line has been broken and this is not a good signal for the current strategy. During the New Session, we need to take a close look at area 1.39. If there is a noticeable decrease signal (especially in the daily chart), new sell orders should be considered. In case the price breaks down of the 1.39 zone, we will temporarily abandon the sell strategy.
Zone 1,255 has been breached. According to the old tactic, our sell orders have been activated. However, it should be noted that the breakout force is quite weak and the rejection appears right after that, so the possibility of the price falling to the target area of 1.24 is not high. Those who have not yet ordered should observe more. If there is an order, it is necessary to closely monitor price movements. In case the price recovers strongly, consider exiting the order early.
Price is moving up to the 0.77 zone as expected. This is a price zone where the sellers can ambush. Therefore, for short-term reversal traders, be prepared to exit your buy order earlier. For mid and long term traders who follow bullish signals on the daily chart, you can continue to hold.