Coleman: Dollar weakens as global economy outlook worsens
The US Dollar has fallen to a one month low against the Japanese Yen, after an extensive rally to a six-year high earlier this month. Expecting a continuation of Monday’s downward momentum, Ian Coleman from First 4 Trading is looking to sell into gains this morning.
The dollar weakened as the evidence began to support the Federal Reserve postponing its expected rate hikes. Concerns over the global economy and conflicts in the Middle East appear to be the reason for the Fed’s potential delay. The dollar index fell to 85.11 on Monday, down from the four-year high of 86.46 earlier in October. The sell-off in USDJPY paused overnight and Ian is expecting to see a mild recovery this morning.
With multiple resistance levels located at: JPY 107.42, JPY 107.40, and JPY 107.48 Ian believes that these barriers will prevent today’s rally from extending higher. With this in mind, Ian is looking to sell into gains at the JPY 107.40 mark, which is also the bespoke resistance level. His two targets for the trade are JPY 107.10 and JPY 106.70. A stop can be placed at JPY 107.60.
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