Over the past couple of years, price has been quite choppy, moving back and fourth between a wide range from 102-116. It looks like price is heading back up towards this resistance level once again, where it's likely we could see price turn back around again or head towards making new highs, breaking past the resistance.
Price was moving in a pretty strong downtrend until the end of 2021, where we instantly saw a reversal and price is now travelling in an ascending channel, breaking previous highs and creating new ones. We did have a slight break of trend in April, however we saw price retrace this move and is back inside the steady ascending channel.
Currently, price is heading towards the channel's top at around 111.5 in this ascending channel. It's likely we could see price treat this as resistance, and reverse, heading towards the channel's bottom; continuing the long-term trend.
We don't really have any order blocks or anything entry wise at the moment, but just based off basic trading lessons, and trading the trend, going short right now wouldn't be a bad idea.
We've got a couple of high and mid-tier news events coming out over the next week or so, including NFP tomorrow at the time of writing this.
We've not had the best NFP reports coming out in the past couple of months, however some analysts are finally seeing a possible comeback as analysts are expecting a 700k jobs increase versus last months 559k gain.
The ADP NFP report beat expectations with a 692k gain versus the 555k consensus. June's Flash Manufacturing PMI climbed from 62.1 to a record high of 62.6, reflecting faster pace of industry growth. Obviously no one knows the report until it's out, however be on the look out for a possible better-than-expected report.
Looking at retail sentiment, most traders are actually short on this pair. Bears are way ahead with 81% being short at the moment, which could actually be a problem as financial institutions will likely try to take out these positions. I can see some short-term bearish moves towards 110.3, however long-term I am bullish on this pair.
The DXY is heading for its biggest monthly jump since 2016 by an impressive US private payrolls report and a hawkish shift by the US Federal Reserve's rates outlook at a meeting held in early June. DXY bulls are also increasingly gathering momentum amid growing concerns over the spread of the Delta variant. DXY is posting gains of about 3% in June against many major currencies such as the Pound, Euro, Yen, Swiss franc and Canadian dollar. All eyes are now on the NFP report coming out tomorrow.
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