US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY
US Dollar Highlights:
- USD Index (DXY) trying for a replay of the summer
- EUR/USD the main driver behind the DXY
- GBP/USD still holding up, but may succumb to selling
- USD/CAD trying to recapture trend-line break
USD Index (DXY) trying for a replay of the summer
The US Dollar Index (DXY) didn’t quite make it down to the trend-line from September of last year, but it did hold the 200-day, relatively speaking, with only a couple of minor recent breaches. The surge thus far this week has a similar look to it.
The push higher has momentum matching rallies that happened from previous multi-week lows, such as in June/July and September of last year. Those lows led to price swings to new cycle highs. That would mean the 100-line could come into play before year-end. A break below 97.11 and the trend-line will dent a bullish outlook, potentially putting significant pressure on the Dollar.
US Dollar Index (DXY) Daily Chart (back to new cycle highs soon?)
EUR/USD the main driver behind the DXY
The Euro broke the channel off the October low, and with a little more weakness it will have no real support to keep it from running lower to the lows beneath 10900. As ~57% of the DXY index, the Euro will be the main driver of its next move. A bump higher from here will have the recent highs, the September trend-line, and 200-day in play as resistance around 11175/90.
EUR/USD Daily Chart (set up for losses)
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GBP/USD still holding up, but may succumb to selling
Cable has held up relatively well given the monster move last month. The digestion phase could take on the shape of a wedge with a little more time, but it will need to hold here around the top slope of the channel off the September low. A breakdown below the slope and 12788 could bring some pressure on GBP/USD and a more pronounced pullback.
GBP/USD Daily Chart (holding well so far)
USD/CAD trying to recapture trend-line break
USD/CAD bounce has the 2012 trend-line back in play, so far it is not fully above but trying to recapture the threshold. A move above 13208 should do the trick and have more upside in play towards the 200-day at 13274 and the May trend-line just above that level. A breakdown through 13115 could indicate recent strength to only be a bounce and have the important 13000-level under attack.
USD/CAD Daily Chart (levels to watch)
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.