US Dollar Technical Forecast: AUD/USD, USD/CAD, GBP/USD, DXY
US Dollar Technical Highlights:
- US Dollar Index (DXY) backing towards big support test
- AUD/USD looking to come off of trend resistance
- USD/CAD bounce for real? Not trusting it…
- GBP/USD still holding its own, bullish so far
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US Dollar Index (DXY) backing towards big support test
The US Dollar Index (DXY) continues to look like it wants to head lower, and with that the lower parallel of a channel in place since last year could soon get tested. It’s a structure that has kept the tepid trend pointed higher, so a hold there is viewed as critical if a larger reversal isn’t to take shape. A breakdown below could trigger big selling as the longer-term trend comes into question with market participants. But as always, must respect support until it’s broken.
US Dollar Index (DXY) Weekly Chart (bottom of channel nearing)
AUD/USD looking to come off of trend resistance
AUD/USD has showed some strength recently, but if the longer-term trend and resistance have anything to say about it, there might not be much more left on the upside from here. Between a one-year trend-line and the 200-day coming down just above it, it’s a tough spot for Aussie to climb through. There is a developing channel off the recent low that traders with a more conservative approach can wait to break before becoming aggressive with shorts.
AUD/USD Daily Chart (turning off resistance)
USD/CAD bounce for real? Not trusting it…
USD/CAD came very near the 13000 mark before bouncing hard on the BoC meeting on Wednesday. The 13000 mark is important (13015 to be exact), because a break below will be not only create a lower-low from July, but also help cement the 2012 trend-line break. Without this confirmation discussed in last week’s USD/CAD article, it is tough to get too bearish. A break, though, and USD/CAD could in trouble for some time to come.
USD/CAD Weekly Chart (bearish leg of patterns could trigger soon)
USD/CAD Daily Chart (Bounce only temporary?)
GBP/USD still holding its own, bullish so far
GBP/USD is holding up well so far given how far it had previously rallied in such a short period of time. If it can maintain a bid off the upper parallel tied to the trend-line off the September low, look for higher levels to come. A little more time would do the chart some good, though, to build a stronger base before attempting to propel higher. Overall bullish at this time.
GBP/USD Daily Chart (holding up well so far)
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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.