The USD is stronger across the major currencies today, including the CAD, AUD and NZD. The greenback is up around 0.24% versus both the Canadian and Australian dollars and approximately 0.35% versus the New Zealand dollar. All three currencies are trading nearer their session lows against the USD.
However, the dollar’s gains tell only part of the story. For traders, the next question is whether the technical breaks can be sustained. What levels keep the USD buyers in control, and what would signal that the momentum is fading?
In the video above, I take a look at each currency pair and outline the technical bias, the risks and the next targets.
USDCAD: Buyers make a move, but the 100-day MA remains a hurdle
The USDCAD moved above its 100-hour moving average at 1.40287 and extended through its 100-day moving average at 1.40442. However, the break above the longer-term moving average could not be sustained. The price is currently near 1.4037, between those two technical levels.
That leaves traders with clearly defined support below and resistance above.
Holding above the 100-hour moving average keeps the near-term advantage with the buyers. However, they still need to get back above—and stay above—the 100-day moving average to give the upside move more credibility.
A sustained break above 1.40442 would open the door toward:
1.4082: The previously broken 38.2% retracement.
1.4093: The 200-hour moving average.
Conversely, a move back below 1.40287 would weaken the bullish bias and put the 50% midpoint of the move up from the August low at 1.40149 back in play. Break below that level, and sellers would have more reason to push toward the 1.3950 area.
The buyers have made progress, but they still have work to do. The 100-hour moving average defines their risk. The 100-day moving average is the next hurdle.
AUDUSD: Buyers had their shot above the 100-day MA. They missed.
The AUDUSD moved above its 100-day moving average at 0.70317 on Friday and again today. On both occasions, the buyers failed to sustain the break.
That failure matters. A move above a longer-term moving average gives buyers an opportunity to take more control. When the price cannot stay above it, traders have to respect the rejection.
The selling has now taken the price back below its 100-hour moving average at 0.7016, shifting the near-term bias in favor of the sellers.
That moving average becomes the close risk-defining level:
Stay below 0.7016: Sellers retain the near-term advantage.
Move back above 0.7016: The downside break loses momentum, and the battle between the 100-hour and 100-day moving averages is back on.
On further selling, the next key downside target comes between 0.6989 and 0.6994, where the 200-hour moving average and a swing area provide a support zone.
The buyers had their shot above the 100-day moving average and missed. Now the sellers have their opportunity below the 100-hour moving average. Can they keep control and push toward the next support area?
NZDUSD: The 100-hour MA gives way. The 200-hour MA is the next test.
The NZDUSD briefly broke below its 100-hour moving average last Thursday, but that break failed. On Friday, buyers leaned against the moving average on two separate occasions and held support, keeping the recovery intact.
Today, that pattern changed.
The upside move stalled at 0.5707, just short of last Thursday’s high near 0.5709. Buyers could not extend the recovery, and sellers subsequently pushed the price below the rising 100-hour moving average at 0.56878.
That break shifted the near-term advantage toward the sellers. The price has since reached 0.5671, bringing the rising 200-hour moving average at 0.5663 into focus.
The distinction is important: breaking the 100-hour moving average weakens the recovery. Breaking the 200-hour moving average would give sellers another technical reason to press lower.
If buyers instead hold support at the 200-hour moving average, the pair would be caught between two clear boundaries:
Resistance: The 100-hour moving average near 0.5688.
Support: The 200-hour moving average near 0.5663.
Between those levels, buyers and sellers would battle for the next shove. A break below the lower moving average would increase the bearish bias. A recovery above the upper moving average would suggest the sellers could not build on their opportunity.
In the video above, I walk through those levels on each chart and explain what buyers and sellers need to do next. The USD has the momentum today. The technical levels will help determine whether that momentum can continue.
This article was written by Greg Michalowski at investinglive.com.
