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US Dollar, EUR/USD, GBP/USD & More: Technical Outlook

US Dollar, EUR/USD, GBP/USD & More: Technical Outlook

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The US Dollar Index (DXY) has taken a sudden turn lower that may be an indication it wants to reverse course, perhaps in a meaningful way. But before thinking to macro about what the recent string of weakness could mean, we must look to support around the November 18 swing-low, and more importantly the 200-day MA. A hold there may stem off more selling and see the DXY turn back higher, but a break will have an important test of the September 2018 trend-line that has helped keep the index moving higher. It would be a solid spot for would-be longs from a risk/reward perspective, while for shorts a break could mean a significant sell-off is underway.

US Dollar Index (DXY) Daily Chart(watch 200-day, trend-line)

US Dollar Index (DXY) daily chart

US Dollar Index (DXY) Chart by TradingView

EUR/USD is currently at a spot of importance. The line running across current levels has numerous inflection points, whether they be highs, lows, or closes, since the very end of July. Yesterday may have been a one-off spike higher, but we will know more on that soon. If the rally can hold and garner more strength, then an important test of the September 2018 trend-line and 200-day MA could quickly come into view. A breakdown that negates the recent surge could mean the Euro will sustain under 11000 and potentially trade to a new cycle low below 10879. The next few days could be quite important.

EUR/USD Daily Chart (at an important spot)

EUR/USD daily chart

EUR/USD Chart by TradingView

GBP/USD has a bullish-looking price sequence underway as it is starting to come out of a nice consolidation pattern. A break above 13012 should have Cable rolling the trend-line from July 2014, which also runs over the 2018 high. The strong connecting points make it a big trend-line to watch over 13100.

GBP/USD Daily Chart (bullish-looking price sequence)

GBP/USD daily chart

GBP/USD Chart by TradingView

For the full set of technical details and charts, check out the video above…

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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