The first trading day of the week is in the books. This Monday morning the US Dollar Index (DXY) has been stuck in a range, and pairs such as EURUSD and NZDUSD are developing setups.
Traders are finding DXY ranging between 90.50 and 91.25. This consolidation has translated to abrupt moves in the Forex major currency pairs. The original downtrend is still intact and traders should focus on price clearing 90.50 to take advantage of further Dollar weakness.
Price action analysis indicates a potential long for EURUSD once price clears 1.21750. Smart money analysis shares a similar bullish bias if price can clear today’s high. Alternatively, if the price closes below this week’s low, we can see price head back down to December lows. At the moment NZDUSD is showing a mixed bias, clearing this week’s high can pave way for longs, and clearing this week’s low, can pave way for shorts.
This week is technically the last full trading week of 2020. Traders should not feel pressured into hitting home runs and are encouraged to stick with their risk management principles. Within a few weeks, traders will be presented with a full new year of trading that they can take advantage of.
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- Read yesterday’s breakdown: USDCHF, EURUSD and NZDUSD Swing Trades for Next Week
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