US Dollar Breaking – GBP/USD, EUR/USD Charts for Next Week & More
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The US Dollar Index (DXY) is flirting with a significant breakdown from the channel it has been stuck in since last year. Further adding to the mix here is that volatility has been extremely suppressed and this could be a sign that this about to change as we head towards a calendar flip. The initial bias with a little bit more weakness to confirm, will be lower, but it would be unsurprising if it turned out to be a fake-break. Nevertheless, it is a good sign that a once steady technical structure may be no more.
US Dollar Index (DXY) Weekly Chart (Channel on verge of snapping)
GBP/USD put on a show last night following the exit polls from the UK general election, with it rallying well over 3 big figures at one point. It has since eased off a bit and could be exhausted in the near-term with ‘buy-the-rumor’ sell the news risk rising. With that in mind, taking a somewhat neutral stance here to see how things settle out. There is a trend-line running over from September 2018 that the overnight high pretty much tagged to a “T”, keep an eye on its influence going forward.
GBP/USD Daily Chart (burst higher may have Cable exhausted)
EUR/USD is trying to make a break for it, and if the DXY is going to make good on its breakdown then the Euro will need to follow through. Right now, price is above the 200-day and September 2018 trend-line, but there needs to be a rally with conviction beyond say the 11300/11400-area before a trend change can grow legs. For now watching to see how this attempt to run higher progresses before drawing any further conclusions in either direction.
EUR/USD Daily Chart (climbing, but still has work to do)
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.