Morning Preview: Can We Get a USD Rebound?
Rowan Crosby • 1 min read
It was a quiet day in overnight trade with the sun setting on the USD. As traders are in a state of ‘wait and see’ ahead of Jackson Hole later in the week, we saw low volumes and weakness in the USD.
The fade out with the US currency helped the Euro and other majors to rally giving us the chance to look for some opportunities as Asian traders enter for the day.
Trade Idea: USD/JPY to Bounce off 109
I spoke yesterday about 109 providing a solid support level for the Yen. Overnight we came and tested that level and for now we’re holding on. With the light volumes I didn’t think it was likely that we would break through that level. That same thinking still applies today.
Traders and market watches are firmly focused on what Mario Draghi and Janet Yellen have to say later in the week as central bankers and key policy makers meet at Jackson Hole in the US. Until that time I would expect trade to be range bound and lacking any kind of follow through.
As such I want to get long at 109 in the USD/JPY. I’m looking for a retrace back to 109.50. We’ve formed a bullish looking candlestick pattern and hopefully we can retrace the USD losses as the Asian session unfolds. Data will be thin so it might be a matter price action being key today.