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US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

2019-11-07 10:10:00
Paul Robinson, Strategist
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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?)

US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

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

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)

US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

EUR/USD Chart by TradingView

Trading Forecasts and Educational Guides for traders of all experience levels can be found on the DailyFX Trading Guides page.

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)

US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

GBP/USD Chart by TradingView

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)

US Dollar Outlook: EUR/USD, GBP/USD, USD/CAD, DXY

USD/CAD Chart by TradingView

***Updates will be provided on the above thoughts and others in the trading/technical outlook webinars held at 1030 GMT on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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