Several currencies are trying to rebound against USD, but lower-highs following peaks could bring more weakness soon. EUR/USD, NZD/USD were just a couple of the pairs we focused on. Yen has been very strong as risk-off hits markets again, more gains seen ahead.
Technical Highlights:
- USD weakness seen as temporary, EUR/USD & NZD/USD lower-highs after tops
- Yen remains well-bid, looking for more strength vs. currencies across the board
For longer-term technical and fundamental analysis, and to view DailyFX analysts’ top trading ideas for 2018, check out the DailyFX Trading Guides page.
USD weakness seen as temporary, EUR/USD & NZD/USD lower-highs after tops
EUR/USD is currently getting a lift from around the May 2016 slope, but after double-topping around the 2008 trend-line a lower-high could soon be in the works. Should we see the bounce fizzle and the euro roll back over, a serious test (or break) of major support could soon be in the works. The area just beneath 12100 has the 2017 breakout level and trend-line from April.
EUR/USD Daily Chart (Double-top, lower high?)
NZD/USD could soon make good on a double-top of its own from over the 7400-threshold. It has good support down to 7176, but it’s in jeopardy of breaking soon. Like EUR/USD a lower-high following a double-top could take shape. Looking below 7176 (price support in confluence with the 200-day MA) there isn’t much preventing kiwi from dropping sharply.
NZD/USD Daily Chart (Double-top, lower high?)
Yen remains well-bid, looking for more strength vs. currencies across the board
Yen has been a monster across the board. USD/JPY continues to look headed towards the 101/100 area following a rejection from resistance. If risk-off becomes increasingly pervasive, look for the pair along with yen-crosses to accelerate lower.
On Wednesday, GBP/JPY broke a big confluence of support and looks headed much lower. There is a trend-line from April not far below, but not seen as significant. Looking for a move to potentially unfold to sub-14000. For more details, check out the GBP/JPY trade set-up.
See how current positioning in various pairs could impact their next moves on the IG Client Sentiment page.
GBP/JPY Daily Chart (Broke big support)
AUD/JPY has support right around the 8178/8145-area (current levels), but at risk of breaking. Intermediate-term target on a break lies in the vicinity of 7700/600. EUR/JPY has support levels arriving at 12937, then 12760, but also seen as likely to head much lower.
And More...
We also looked at USD/CHF, GBP/USD, USD/CAD, AUD/USD, CHF/JPY, AUD/NZD, USD/ZAR, DAX, FTSE, Nikkei, S&P 500, and gold. For the full outlook, please see the video above…
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---Written by Paul Robinson, Market Analyst
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