The US Dollar Index (DXY) traded quietly with several major trading centers closed for the holiday. Trade remains range-bound between the 130-day moving average and the 30-day exponential moving-average (on a closing basis). The (9-period) RSI upward sloping trendline could provide a clue for future direction. Losing support there would dampen the short-term bullish tone and would expose Fibonacci support at 79.223. Meanwhile, a sustained clearance of 130-day resistance would favor a move towards the 200-day moving average.
The EUR/USD managed to recover off 1.3080 (the key 50% retracement level) as the 2-year yield differential (vs. the US) rebounded off 3-month lows. Euro bulls will now need to pay attention to the daily (9-period) RSI downward trendline for hints of future direction. A break above RSI resistance could trigger a re-test of the 25-day exponential moving average located at 1.3274. A rejection, however, re-opens 1.3080 and potentially the 1.2970 swing low.
The British Pound continues to underperform, losing nearly half a percent on the day vs. a trade-weighted basket of currencies. The GBP/USD remains near the 200-day moving average since failing to reclaim the 1.5484 pivot. The near-term outlook is bearish while price-action remains below this former swing low. The 1.5260/1.5350 region would be the next target for Sterling bears.
Meanwhile, the GBP continues to consolidate off recent cycle lows vs. the Aussie and the Swissy. Daily RSI levels reached such oversold conditions late last week that a corrective bounce was warranted. The limited short-term recovery, however, suggests that the GBP/AUD & GBP/CHF are both vulnerable to renewed selling pressure.
The USD/JPY managed to find support at the 50-day moving average once again. Dollar bulls will now need to reclaim the 83.15 region to avoid a re-test of the 50% retracement level at 82.45. Meanwhile, Japan’s exchange rated index is dangerously close to negating a possible head & shoulders top. Exceeding 172.50 will shift focus from neckline support back to the all-time high at 173.30.
STRATEGY UPDATE:
BUY USD/JPY at 82.52, targeting 83.62 1st, risking 81.97
SELL GBP/AUD at 1.5420, targeting 1.5280 1st , risking 1.5475
SELL GBP/CHF at 1.4915, targeting 1.4680 1st , risking 1.4970
The EUR/USD managed to recover off 1.3080 (the key 50% retracement level) as the 2-year yield differential (vs. the US) rebounded off 3-month lows. Euro bulls will now need to pay attention to the daily (9-period) RSI downward trendline for hints of future direction. A break above RSI resistance could trigger a re-test of the 25-day exponential moving average located at 1.3274. A rejection, however, re-opens 1.3080 and potentially the 1.2970 swing low.
The British Pound continues to underperform, losing nearly half a percent on the day vs. a trade-weighted basket of currencies. The GBP/USD remains near the 200-day moving average since failing to reclaim the 1.5484 pivot. The near-term outlook is bearish while price-action remains below this former swing low. The 1.5260/1.5350 region would be the next target for Sterling bears.
Meanwhile, the GBP continues to consolidate off recent cycle lows vs. the Aussie and the Swissy. Daily RSI levels reached such oversold conditions late last week that a corrective bounce was warranted. The limited short-term recovery, however, suggests that the GBP/AUD & GBP/CHF are both vulnerable to renewed selling pressure.
The USD/JPY managed to find support at the 50-day moving average once again. Dollar bulls will now need to reclaim the 83.15 region to avoid a re-test of the 50% retracement level at 82.45. Meanwhile, Japan’s exchange rated index is dangerously close to negating a possible head & shoulders top. Exceeding 172.50 will shift focus from neckline support back to the all-time high at 173.30.
STRATEGY UPDATE:
BUY USD/JPY at 82.52, targeting 83.62 1st, risking 81.97
SELL GBP/AUD at 1.5420, targeting 1.5280 1st , risking 1.5475
SELL GBP/CHF at 1.4915, targeting 1.4680 1st , risking 1.4970
