EURUSD (1.13) was limited in its price action yesterday, closing in a near doji looking pattern. Price action remains stuck near 1.130 a level that has held up since last Friday’s retail sales boost to the US dollar. A break below 1.30 could accelerate declines in EURUSD for a move to 1.1220, where the next minor support exists. This dip could potentially signal the end of the medium term uptrend as any rallies will be capped near this new resistance of 1.130 – 1.1373. Below 1.1220, the next main cluster of supports is seen at 1.107 through 1.10285.
An alternate view is the bullish flag which still has potential to see an upside move in EURUSD, but for this to be validated, a higher close above 1.154 is needed, in which case EURUSD could test 1.1638.
USDJPY (109) is well protected against further declines as the dollar trades above 108.17 – 107.69 support. Any declines should see the support level holding up in the near term, all the way to 107. However, a close below 107 could signal further downside with 105 emerging as the next support level. USDJPY is in the process of forming what could be a bullish divergence at the current levels of 107 through 105. This could eventually see USDJPY move towards 111.0 and possible through to 112.5 – 112.0 levels of resistance.
GBPUSD (1.44), having broken the median line is retracing its losses back to the support/resistance level of 1.451 – 1.447. This price point sits within the larger weekly median line and could therefore be a strong level to break (unless economic data from the UK turns bullish enough to sustain the moves). To the downside GBPUSD is likely to fall to 1.42 – 1.410 levels and for the most part, sterling could remain range bound.
USDCAD (1.28) is struggling to break free of the 1.2985 – 1.2923 resistance. This could see another dip lower to 1.26. The Stochastics shows a hidden divergence at the recent lower highs and this could confirm the downside view, especially with Oil prices pushing higher. USDCAD is likely to see a ranging pattern within 1.286 – 1.260 – 1.2525 levels.
USDCHF (0.977) could make a dip to the downside, with the price level of 0.9618 – 0.960 playing a key role. The downside looks limited for the moment while resistance at 0.9848 – 0.9928 is worth keeping an eye on. Looking for a higher low near the support of 0.9618 – 0.96 could see a possible shift with the start of a new uptrend.
