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Sep 15, 2014
DXY: Monitoring for signs of a pause/retracement - JPMorgan
FXStreet (Bali) - JP Morgan FX Strategists are closely monitoring for signs of a pause/retracement in the stellar USD bull run.
Key Quotes
The short and medium term themes continue to develop highlighted by the overall bullish setup for the USD. Still, with the week’s close ending with a mixed tone, we are closely monitoring for signs of a pause/retracement."
"However, at this point, there remains little evidence of a reversal particularly given the impulsive backup in US rates. An important focus stays on the commodity currencies highlighted by the bearish bias for AUD/USD. Importantly, last week’s breakdown below the critical .9238/.9180 support zone argues for additional weakness while suggesting a higher risk that a deeper corrective phase can develop."
"In turn, we continue to see potential for a closer test of the .8982/62 support zone (includes the head and shoulders objective), if not the .8890/58 area (76.4% retrace). Similarly, the post-RBNZ price action for NZD/USD suggests the downtrend is accelerating following the violation of the important .8282/35 support zone (76.4% retracement. Short term targets enter at the .8148 area (61.8% retracement from the Sept ’13 low), followed by the .8051 Feb low."
"Moreover, last week’s push above the 1.1027/54 zone for USD/CAD suggests an increased risk that prices can extend back to the March high particularly after holding key support in the 1.08 area."
Key Quotes
The short and medium term themes continue to develop highlighted by the overall bullish setup for the USD. Still, with the week’s close ending with a mixed tone, we are closely monitoring for signs of a pause/retracement."
"However, at this point, there remains little evidence of a reversal particularly given the impulsive backup in US rates. An important focus stays on the commodity currencies highlighted by the bearish bias for AUD/USD. Importantly, last week’s breakdown below the critical .9238/.9180 support zone argues for additional weakness while suggesting a higher risk that a deeper corrective phase can develop."
"In turn, we continue to see potential for a closer test of the .8982/62 support zone (includes the head and shoulders objective), if not the .8890/58 area (76.4% retrace). Similarly, the post-RBNZ price action for NZD/USD suggests the downtrend is accelerating following the violation of the important .8282/35 support zone (76.4% retracement. Short term targets enter at the .8148 area (61.8% retracement from the Sept ’13 low), followed by the .8051 Feb low."
"Moreover, last week’s push above the 1.1027/54 zone for USD/CAD suggests an increased risk that prices can extend back to the March high particularly after holding key support in the 1.08 area."