USDOLLAR Clears Resistance but for How Long?
- EURUSD back-to-back inverted hammers, inside days = coiling.
- USDCAD could fall to 1.0815 support again.
- August is a seasonally favorable month for the US Dollar in the QE era.
The US Dollar has had a strong run over the past few weeks, with the bull flag originating on July 31 producing new highs and a move through the critical 10544 resistance band in the USDOLLAR Index. However, after a doji yesterday and an inside day today thus far, the USDOLLAR may be signaling that a bit of give back is due.
Be it profit taking or new sellers entering the market - the USDOLLAR is at overbought levels in both its Slow Stochastics and MACD, coinciding with oversold readings in the same indicators in EURUSD and GBPUSD.
EURUSD's potential falling wedge has been interrupted by back-to-back inside days following two inverted hammers. The EURUSD market increasingly reminds one of a coiling spring; one should look beyond $1.3330/35 or $1.3440/75 for the next breakout.
See the above video for technical considerations for the four major USD pairs (AUDUSD, EURUSD, GBPUSD, USDJPY) as well as USDCAD, which faces significant event risk today amid Canadian labor data figures due out at 12:30 GMT.
--- Written by Christopher Vecchio, Currency Strategist
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