The US Dollar Index (DXY) is trading around an important swing-high, may be ready to retreat a bit. With that the euro is likely to bounce but may not offer great risk/reward. GBP/USD doesn’t look very promising to the upside. USD/JPY rally could bring short chart patter into play.
Technical Highlights:
- US Dollar Index (DXY) trading around resistance, watch t-line
- Euro could bounce while the pound continues to trade lower
- AUD/NZD pullback could offer opportunity here soon
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US Dollar Index (DXY) trading around resistance, watch t-line
The US Dollar Index (DXY), with the help of Italy headlines pushing down the euro, touched off on resistance created late last year right around the 95-mark. Today, we are thus far seeing a near 180 of the move higher from yesterday, putting a trend-line off the April low into focus in the immediate future. A break below the trend-line should usher in more weakness for the DXY, but it is unclear how much momentum will come in as the down-move may only prove to be corrective, and thus choppy.
US Dollar Index (DXY) Daily Chart (Resistance)
US Dollar Index (DXY) 4-hr Chart (Trend-line)
For the intermediate-term fundamental/technical outlook, check out the USD Forecast
Euro could bounce while the pound continues to trade lower
EUR/USD slipped below the November low yesterday, but is trying to make a strong recovery this morning. It has resistance not far ahead to contend with near 11700. It’s a tough spot, tactically, to be doing much of anything – too weak to buy, too extended to short. We’ll wait things to play out a bit before taking any actions at this time.
EUR/USD Daily Chart (Bounce?)
For the intermediate-term fundamental/technical outlook, check out the Euro Forecast
GBP/USD is acting extremely weak recently, with it ‘dribbling’ lower. This type of price action is likely the result of buyers continuing to try and buy the decline, a strategy which had worked well al through 2017 into the early-part of this year. But with the rally not coming, longs are losing their staying power.
Yesterday, there was also a breach of a support zone dating back to October, making further selling likely. The thinking on this end is that we will soon see another rush lower as market participants throw in the towel on renewed long interest. The area around 13000 is targeted as the next level of support.
GBP/USD Daily Chart (Has room to go before bounce)
For the intermediate-term fundamental/technical outlook, check out the British Pound Forecast
AUD/NZD pullback could offer opportunity here soon
AUD/NZD is pulling back into support around the 18300-area, which could offer a spot for new longs to join in on the move off the April low. Still need to see a solid bullish rejection of support, but there is confluence in the area which makes it an attractive proposition. Next up in terms of resistance would be over 11000.
AUD/NZD Daily Chart (Pullback to support)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
