US Dollar, EUR/USD, USD/JPY, NZD/USD, USD/CHF – Weekly Technical Outlook
- US Dollar uptrend seems to be back into focus following gains
- EUR/USD eyeing key support zone, USD/JPY may consolidate
- NZD/USD prone to extending losses, USD/CHF could rise
EUR/USD – Slightly Bearish
The US Dollar mounted a comeback this past week, extending gains against the Euro. This followed EUR/USD establishing a Shooting Star at the end of August after rejecting the 1.1909 – 1.1887 resistance zone. After then taking out the 23.6% Fibonacci retracement at 1.1806, the pair is setting itself up to retest the key 1.1704 – 1.1664 support zone.
Meanwhile, a bearish Death Cross between the 20- and 50-day Simple Moving Averages continues to underscore the technical bias to the downside. Keep a close eye on RSI should the Euro weaken to the August low. Positive divergence could emerge, showing fading downside momentum, which can precede a turn higher. Otherwise, clearing the key support zone exposes the 1.1603 – 1.1630 range thereafter.
USD/JPY – Neutral
The US Dollar continues to consolidate against the Japanese Yen, with USD/JPY confined between key support and resistance levels. The former appears to be the 61.8% Fibonacci retracement at 109.07 while the latter sits at the 23.6% level at 110.67. Following last week’s test of support, the next leg could be towards the top of the range. Meanwhile, the 200-day SMA is slowly creeping higher. This could reinstate the dominant upside focus seen from the beginning of this year.
NZD/USD – Bearish
The US Dollar appreciated against the New Zealand Dollar this past week as well. NZD/USD turned lower after testing the ceiling of a Falling Wedge, opening the door to making its way towards the floor. While the outlook remains bearish within the confines of the chart formation, the pattern is typically associated with a bullish view.
A breakout above the wedge could be a sign that the uptrend from the end of last year could resume down the road. Until that possibility, prices are facing the key 20- and 50-day SMAs, where a bullish Golden Cross remains in play. Clearing the 50-day line may open the door to retesting the 0.6943 and 0.6881 inflection points. Beyond those sits the August low just above 0.6798.
USD/CHF – Bullish
The US Dollar closed at its highest in over 5 months against the Swiss Franc last week, seemingly ending prolonged consolidation since the middle of June. USD/CHF took out the key 0.9275 – 0.9239 resistance zone, exposing the 0.9376 inflection point from March. Standing in its way appears to be a falling trendline which has its origins from April 2019.
It could reorient the pair back to the downside, particularly as negative RSI divergence shows that upside momentum is fading. Extending the uptrend since the beginning of this year entails taking out the key 0.9435 – 0.9473 resistance zone. Otherwise, a pivot back down may open the door to refacing support at 0.9100.
--- Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
