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Can risk aversion extend its stay in the markets and weigh on commodity currencies again? Here’s a look at the potential setups and inflection points this week.

Significant Forex Levels to Watch
AUD/USD USD/CAD NZD/USD
Week Open (WO) 0.7893 1.2673 0.7308
Previous Week High (PWH) 0.7949 1.2753 0.7417
Previous Week Low (PWL) 0.7838 1.2630 0.7247
Top Weekly ATR (tWATR) 0.7959 1.2763 0.7371
Bottom Weekly ATR (bWATR) 0.7827 1.2583 0.7245
Other significant levels 0.7800, 0.7900 1.2500, 1.2600 0.7300, 0.7200

In case you’re wondering what ATRs are all about and how I computed those figures, make sure you check out my entry explaining my trading strategies.

Here are some of the comdoll forex setups I’m looking at this week:

AUD/USD: 1-hour

AUD/USD 1-hour Forex Chart
AUD/USD 1-hour Forex Chart

The Aussie recently broke below its descending triangle support and is now moving inside a descending channel pattern. Price is testing the resistance and could be due for a move back to support since stochastic is already indicating overbought conditions.

However, if Aussie bulls try to get back in the game and push for an upside break, a reversal from the downtrend could be underway. RBA minutes and Australian jobs data are up for release this week, possibly dictating where the Aussie is headed next.

USD/CAD: 4-hour

USD/CAD 4-hour Forex Chart
USD/CAD 4-hour Forex Chart

It looks like the Loonie ain’t done with its pullback, fellas! The pair has a few more pips to go before testing the descending trend line resistance that lines up with an area of interest visible on the 4-hour chart.

Stochastic is already turning south, though, so selling pressure could pick up and lead to a move back to the swing low at 1.2415. But if the correction continues, price could still test the 50% Fib closer to the 1.2900 major psychological level.

U.S. retail sales data and the FOMC minutes could push the dollar around this week while the Loonie will have to take its cue from oil prices, market sentiment, and Canadian CPI data.

NZD/USD: 1-hour

NZD/USD 1-hour Forex Chart
NZD/USD 1-hour Forex Chart

This pair is also moving in a descending channel on its short-term time frame and is testing resistance at the moment. A bounce could take it back down to support around .7225 while a break past .7325 could signal a potential reversal.

A bit of bearish divergence can be seen since stochastic made higher highs while price had lower highs. New Zealand just printed stronger quarterly retail sales data over the weekend and is set to print its PPI figures next.

Cheers,

Happy

See also: Q2 2017 Trading Performance Review

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.