Recently, the dollar spectrum has been a mixed bag with some holding more directional conviction than others; USD/CHF pullback into support attractive from the long-side. A few key cross-rates have levels of interest. European equities looking vulnerable, specifically the DAX & FTSE.

Technical Highlights:

  • USD/CHF in focus on pullback form long-side, USD/JPY from short-side
  • In the cross-rate world, looking at GBP/NZD, AUD/JPY, and others
  • DAX, FTSE looking vulnerable as they continue to under perform

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/CHF in focus on pullback form long-side, USD/JPY from short-side

Last week, USD/CHF broke above resistance surrounding the mid-9400s and since then pulled back into the area. Not only is prior price resistance now viewed as support, but there is also a trend-line rising up from last month’s low in confluence. Should a rise today hold, then a higher-low could be cemented for another leg higher.

The move higher, though, may still be corrective in nature as an ascending wedge within a downtrend could form. But for now, running with current support at hand as a possible spot for longs to join in an ongoing move higher.

USD/CHF Daily Chart (At confluence of support)

usdchf daily price chart at support

USD/JPY on the other hand isn’t looking too healthy in the dollar-spectrum with yesterday’s rejection at resistance in an ongoing downtrend. Risk trends here could become a factor even though the dollar may generally firm up, leaving the dollar to decline versus an even stronger yen.

USD/JPY Daily Chart (Rejected at resistance in downtrend)

usdjpy daily chart turn down from resistance

Also checked in on GBP/USD, EUR/USD, NZD/USD, and USD/CAD…

In the cross-rate world, looking at GBP/NZD, AUD/JPY, and others

GBP/NZD is of interest due to its numerous bottoms down near 18900 and lower highs since January. Price action is taking the form of a descending wedge just beneath a trend-line running higher since August. A close below all recent lows will have focus shifted towards 18615/560

See how current positioning in various pairs could impact their next moves on the IG Client Sentiment page.

GBP/NZD Daily Chart (Descending wedge forming)

gbpnzd daily price chart with wedge

AUD/JPY found good support around 8150 earlier in the month, but yesterday turned sharply lower from resistance in the mid-8400s. Yesterday’s key-reversal bar could cement a high for now and is viewed as a point of reference for shorts.

AUD/JPY Daily Chart (Key-reversal at resistance)

audjpy daily price chart at resistance

Other crosses we looked at included GBP/JPY, CHF/JPY, AUD/NZD, EUR/AUD, and a few others…

DAX, FTSE looking vulnerable as they continue to underperform

European equities continue to underperform the U.S., and by a fairly wide margin. Yesterday’s turn lower may have cemented lower-highs in both the DAX and FTSE. Check out this morning’s commentary for more details on the FTSE.

DAX Daily Chart (Lower-high in the works)

dax daily chart with possible lower-high

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---Written by Paul Robinson, Market Analyst

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