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US Dollar Outlook: USD, USD/JPY, EUR/USD Key Levels

US Dollar Outlook: USD, USD/JPY, EUR/USD Key Levels

Tammy Da Costa, Analyst

US Dollar Forecast: Neutral

  • US Dollar Index (DXY) continues to trade within a well-defined range
  • EUR/USD stalls at critical support, below 1.16
  • USD/JPY takes a breather after falling from psychological resistance

The safe haven US Dollar has recently lost momentum against major currency pairs as fundamentals continue to weigh on risk appetite.

After breaking above the key psychological level of 90.00 in June, the US Dollar Currency Index (DXY) has proven to be on a strong upward trajectory which continues to hold, at least for now.

With price action currently testing the 93.5 handle, prices are trading above both the 50 and 200-day moving average (MA) with the MACD above the zero-line.

US Dollar Currency Index (DXY) Daily Chart

US Dollar Outlook: USD, USD/JPY, EUR/USD Key Levels

Chart prepared by Tammy Da Costa using TradingView

With prices now resting below the 50% retracement level of the 2001 – 2008 move at 95.843, this level will likely continue to hold as strong resistance for both the short and medium-term move.

EUR/USD Technical Analysis

EUR/USD price action is currently trading within a well-defined range between the confines of a descending channel.

At the time of writing, the major currency pair continues to test the 50% Fibonacci retracement level of the 2018 – 2020 around the critical psychological level of 1.160.

Meanwhile on the daily time-frame, the moving average convergence/divergence (MACD) has crossed below the zero line, a potential indication that the momentum on the downtrend may be losing steam.

EUR/USD Daily Chart

US Dollar Outlook: USD, USD/JPY, EUR/USD Key Levels

Chart prepared by Tammy Da Costa using TradingView

As long as the channel continues to hold, the 1.16 handle will likely remain as immediate resistance with a break higher bringing the next big resistance level into play at 1.18.

To learn more about price action or chart patterns, check out our DailyFX Education section.

USD/JPY Technical Analysis

After climbing to the key psychological level of 114, the momentum of the uptrend has temporarily stalled allowing bears to drive prices slightly lower.

With the MACD trading well-above the zero-line, the uptrend currently remains intact for now with support and resistance between 113 and 114 respectively.

USD/JPY Daily Chart

US Dollar Outlook: USD, USD/JPY, EUR/USD Key Levels

Chart prepared by Tammy Da Costa using TradingView

In order for bullish continuation to be probable, bulls will need to drive prices above both 114 and above the next critical level of resistance at the 3 year high of 114.55.

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

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

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