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)
U.S. Dollar Currency Index (DXY) Chart by TradingView
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
