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Trading Outlook for USD, Sterling/Euro/Yen-crosses & More

Trading Outlook for USD, Sterling/Euro/Yen-crosses & More

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The US Dollar Index (DXY) has thus far fallen shy of the targeted resistance zone on the daily chart and is currently turning lower. Looking at the 4-hr chart, there is good support which arrives around the 96.70-area. On a pullback to identified support interest lies in seeing buyers step in for another push higher towards 94.

US Dollar Index (DXY): 4-hr

EURUSD looks poised to continue lower within the context of a triggered ‘head-and-shoulders’ pattern, but may soon test a critical area of resistance between ~11840 and 11880 (‘neckline' of H&S). This is viewed as the potential sweet-spot to look for the euro to turn back lower below 11700.

GBPUSD is currently trading below the 13400/500 support zone after having had a nasty rejection from the 2014 trend-line and post-Brexit gap-fill. The next eyed level of support arrives around 13268. USDJPY is finding some resistance the past couple of days on a test of the underside of a trend-line rising up from September. It still has a bullish trend working for it but needs to hold up here soon if it is to march on higher. AUDUSD had a nice reversal-bar yesterday after trying to drop through support around 7800, which shifts the focus to neutral at least and a rebound being the more likely outcome.

GBPAUD is vulnerable to turning lower from around the 17100/150 level after another rejection of this area in the span of a week. GBPNZD could put in an ascending wedge on the 4-hr chart, but will need to hold right around 18500 and turn higher if it is to come to fruition. The nature of the wedge is more likely to see a top-side break, but will need to wait for confirmation before taking action. USDMXN still looks positioned for higher prices after recently breaking out of a symmetrical triangle.

EURGBP is bouncing from a key trend-line rising up from November 2015, but will quickly run into trouble around 8850. EURAUD is building an ascending wedge on the daily time-frame and is knocking on the door of a breakout; a firm close above 15100 should spark buying interest.

GBPJPY and AUDJPY are both in the process of forming descending wedges on the 4-hr, with the later having an apex arriving near key trend-line and horizontal support.

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AUDJPY: 4-hr

Gold and silver remain vulnerable to further weakness as long as they stay below ~1296 and ~17.20, respectively. Crude oil put in a big rejection-bar yesterday on an attempt to cross over an intermediate-term trend-line and stay above 52. This shifts momentum to the downside for the foreseeable future.

(Commodities/equity indices begin here in the video.)

The S&P 500 looks poised to test a pair of top-side trend-lines in the low 2520s and 2530s. The Nasdaq 100 could be in the process of carving out a broad ascending wedge, a topic we discussed in yesterday’s post. The DAX and CAC continue to work their way higher, with the German index poising itself for an eventual move to its old record high at 12951. Dips will be watched for potential long-entries. The FTSE finally recaptured big resistance around 7300, and is trying to overtake a trend-line off the August high. The bias there has turned neutral to bullish in light of recent days events.

For full technical considerations, please see the video above…

---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.