The U.S. Dollar Index (DXY) may be undergoing more than a simple correction here, with an upward channel on the verge of breaking. The Euro will lead the charge here if this is the case as it is the largest currency versus the Dollar. USDJPY is up against trend resistance and may be set up to retreat for a bit.
Technical Highlights:
- US Dollar Index (DXY) on verge of larger down-move
- EUR/USD positioned to trade higher if resistance breaks
- USD/JPY at trend resistance, waiting for negative price action
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US Dollar Index (DXY) on verge of larger down-move
The US Dollar Index (DXY) looks headed for lower prices here as a lower-high could soon lead to a lower-low and a break of the upward grind its been in. The weak grinding price action wouldn’t take much to lead to a downside momentum-move. A move below 97.86 is seen as quickly having the trend-line from the 2018 low and 200-day in focus, with a break below that confluence leading to a pair of underside trend-lines dating back a year-ago.
US Dollar Index (DXY) Daily Chart (larger down-move looks in store)
EUR/USD positioned to trade higher if resistance breaks
The Euro is the antithesis of the DXY, as it makes up roughly 57% of the index. With that in mind, the trend-line from Feb of last year could come into play along with the 200-day at 1.1259. Beyond there are a couple of trend-lines running over from early this year and last September. If the channel resistance holds here, we should know very soon whether this is the case, then the downward trend since June will remain intact.
EURUSD Daily Chart (watch upper parallel)
USD/JPY at trend resistance, waiting for negative price action
USD/JPY has extended nicely in recent sessions, bringing into play a channel line from late-April. Price action isn’t yet bearish, but should momentum start to turn down here then a pullback at the least could get under way. If resistance doesn’t keep a lid on price, the next area of resistance clocks in around 108.80 up to the 200-day at 109.44 and declining.
USD/JPY Daily Chart (at upper parallel)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
