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The US dollar is coming under fire as the euro takes out key levels, USD/JPY is rolling over from a wedge along with risk markets. We also looked at the recent uptick in volatility in cross-rates along with an expected breakout coming in precious metals.

Highlights:

  • EUR/USD breaks back above ‘neckline’ & trend-line shifting focus on move higher if resistance just ahead can be broken
  • USD/JPY is rolling over from trio of resistance, looking for ~11175 soon
  • Looked at other USD-pairs, key cross-rates, and triangles forming in gold and silver

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The US Dollar Index (DXY) is at serious risk of resuming the downtrend starting dating back to the start of the year. In the past couple of sessions EUR/USD has run over the ‘neckline’ of the widely-watched ‘head-and-shoulders’ pattern as well as the trend-line off the ‘head’ of the formation. This helps clear a path towards the highs in September, but must first overcome resistance around the 2010 low of 11876. The ideal scenario is for a small pullback to develop before running through resistance. In ‘wait-and-see’ mode at the moment.

EUR/USD:Daily

Technical Outlook for EUR/USD, USD/JPY, Cross-rates, Silver & More

USD/JPY recently broke down from a wedge which developed at confluence consisting of three points; underside of September 2016 trend-line, August 2015 trend-line, and a pair of peaks from May to July. Looking for a decline to the next area of big support around the 11175-area where horizontal price support and the 200-day MA meet.

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USD/JPY:Daily

Technical Outlook for EUR/USD, USD/JPY, Cross-rates, Silver & More

GBP/USD is in a choppy range still above trend-line support, avoiding for now until better clarity. USD/CAD clinging to a trend-line off the September low, but looks vulnerable to breaking. AUD/USD is at a trend-line of interest off the December low, while NZDUSD is attempting to carve out a higher-low after hitting support late last month.

EUR/AUD and EUR/NZD have been on a tear, but both face critical tests of resistance at ~15600 and ~17200, respectively. How they respond here will help provide information as to the next move. The yen-crosses all look vulnerable for the most part with USD/JPY rolling over and stocks clearly weakening. USD/MXN is developing an ascending wedge right at critical resistance from earlier in the year and a trend-line extending higher from November 2015.

USD/MXN: Daily

Technical Outlook for EUR/USD, USD/JPY, Cross-rates, Silver & More

(Commodities/ Equity indices portion of the recording starts here.)

Gold and silver are both coiling up nicely and should be ready to join other markets in making extended moves. The symmetrical triangles should be ready to break soon, but the key is waiting for the break first before anticipating it given the nature of these technical patterns. (In tomorrow’s “Becoming a Better Trader” webinar we will be discussing these patterns in detail.)

Stocks are taking it on the chin, with the Nikkei, DAX, CAC, and FTSE all coming under considerable pressure. The S&P 500 looks to be joining in on the sell-off with the recent break of a rising wedge. Looking for some more downside to come before a bounce develops.

Silver: Daily

Technical Outlook for EUR/USD, USD/JPY, Cross-rates, Silver & More

For full technical considerations, please see the video above…

---Written by Paul Robinson, Market Analyst

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