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A Weekly Technical Perspective for EUR, GBP & the U.S. Dollar

A Weekly Technical Perspective for EUR, GBP & the U.S. Dollar

Michael Boutros, Strategist

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Every now and then it’s extremely useful to just scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. We looked at a few of these charts in today’s Weekly Strategy Webinar and heading into the start of a new month / quarter, here are the key levels to consider.

DXY Weekly

DXY Price Chart- Weekly Timeframe

Notes: The dollar index is approaching confluence resistance around the 94-handle where the 2016 low-week close (93.89) converges on the median-line (blue) and longer-term slope resistance (red). The focus is on this threshold heading into October with the immediate rally at risk while below. Key support now rests with the close-low at 91.33.

Bottom line: The focus heading into October is on a break of the 91.33 – 94 range. From a trading standpoint, I would be looking to fade an exhaustion rally into range resistance. Keep in mind we have U.S. Non-Farm Payrolls on tap this Friday.

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EUR/USD Weekly

EURUSD Price Chart- Weekly Timeframe

Notes: Last month we highlighted a key resistance confluence in Euro as the pair was approaching the upper median-line parallel / 2012 low at 1.2042/80 with, “the immediate risk for some sort of correction” targeting, “1.1876 backed by the 50-line, currently ~1.1720s.” A low was registered last week at 1.1717 and heading into the start of the month the focus is on support at the late-2015 swing high which converges on the 50-line around 1.1714.

Bottom line: I’m looking for a reaction off this support zone- A break lower from here risks a large-scale correction in targeting 1.1616 & 1.1366-1.1423 (broader bullish invalidation). Interim resistance now stands at 1.19 with a breach above 1.2042 targeting the 50% retracement / upper parallel at 1.2167.

Check out our Q4 EUR/USD projections in our Free DailyFX Trading Forecasts

EUR/JPY Weekly Chart

EURJPY Price Chart- Weekly Timeframe

Notes:The late-June breakout above channel resistance has kept the outlook weighted to the topside for some time now in EURJPY with the advance responding to is first major test of technical resistance last month at 134.29. This level is defined by the 61.8% retracement of the 2014 decline converged on the upper median-line parallel of the pitchfork extending off the post-Brexit July low. Interim support rests ~131.50 with key support & bullish invalidation at 128. A breach higher targets the 1.618% ext at 136.32 and the 61.8% retracement of the 2008 decline at 141.

Bottom line: from a trading standpoint, the outlook remains constructive but I’m looking for the exhaustion pullback to offer more favorable long-entries lower down near structural support.

GBP/USD Weekly

GBPUSD Price Chart- Weekly Timeframe

Notes:I noted that Cable was my favorite pair last month as the pair was testing a major resistance confluence around 1.3270. The topside breach fueled a rally that saw Sterling fill he Brexit gap (which also happens to be the 2016 high-day close) at 1.3675 (high registered at 1.3658- close enough). The pullback is now testing that zone as support.

Bottom line: Not a pair I’m interested in shorting and although we may get some further pullback off these levels, the broader outlook remains weighted to the topside while within this ascending pitchfork formation.

See how shifts in GBP/USD retail positioning are impacting trend- Click here to learn more about sentiment!

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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