US Dollar Tumble Finds Little Support against Euro

The EURUSD has defied expectations and broken to fresh year-to-date peaks, bucking a series of lower lows and lower highs. Our short-term bearish bias has clearly been shaken, and the next major resistance level comes at a confluence of trend-channel highs and relatively less-significant Fibonacci retracement marks.

Euro / US Dollar

The EURUSD has defied expectations and broken to fresh year-to-date peaks, bucking a series of lower lows and lower highs. Our short-term bearish bias has clearly been shaken, and the next major resistance level comes at a confluence of trend-channel highs and relatively less-significant Fibonacci retracement marks. The 1.4230 mark represents the confluence of the 78.6 percent retracement of the 1.4710-1.2450 move and the top of the pair’s month-long price channel. The next significant swing-high can be found at December peaks of 1.4365 and, much further away, 1.4714. Price remains in overbought territory, but very short-term momentum favors further gains.

British Pound / US Dollar

The GBPUSD has likewise shaken our bearish bias, and the pair threatens to close above important medium-term Fibonacci resistance on today’s sharp advance. The GBP previously failed at the 50.0 percent Fibonacci retracement of the 1.8680-1.3470 move at 1.6070—suggesting it could set an important short-term top. Yet it subsequently threatened important swing-high price ceilings near 1.6200, with a break to target the 61.8 percent retracement of the same move at 1.6680. A close below 1.6070 would not violate our bearish bias, and we are reminded that price remains in heavily overbought territory through a wide range of oscillators.

Australian Dollar / US Dollar

The AUDUSD has broken to fresh highs and, in the process, met resistance at the confluence of trend channel highs and the 78.6 percent Fibonacci retracement of the 0.8520-0.6000 move at 0.7980. Though it is mostly unwise to sell into sell into such impressive strength, a failure at said resistance would suggest a noteworthy short-term top is likely. Former Fibonacci resistance at 07560 likewise coincides with trend channel lows, and any sell-offs could target said level. Of course, a break of 0.7980 could eye a full retracement of the 0.8520-0.6000 move (at 0.8520), and only a relatively minor swing-high at 0.8100 represents a tangible price ceiling.

New Zealand Dollar / US Dollar

The NZDUSD has forged fresh 8-month highs on today’s rally, but the pair remains at clear risk of pullback in heavily overbought territory. Daily RSI studies show a slight divergence in fresh price highs but a lower peak in the oscillator. Next resistance is relatively minor at 10/7 highs of 0.6426, while more solid price ceilings can be seen at trend channel tops and the 50.0 percent Fibonacci retracement of the 0.8220-0.4900 move at 0.6560. Support is seen at previous resistance of 0.6266 and clear congestion levels at 0.6100.

US Dollar / Japanese Yen

The USDJPY remains at risk of further losses as it has clearly reversed off of significant 200-day Simple Moving Average resistance and turned lower. The pair now finds itself at makeshift price floors of the 100-day SMA, but more firm support is seen at 3-month lows of 93.85. Said level roughly coincides with the 50.0 percent Fibonacci retracement of the broader 87.20-101.50 move and will likely provide a strong challenge for bears. Nearest resistance remains the 200-day SMA at 97.25.

US Dollar / Canadian Dollar

The USDCAD has clearly surpassed our expectations and continued to plummet, breaking below its falling trend channel. Next support is a relatively minor 78.6 percent Fibonacci retracement of the 1.0300-1.3060 move at 1.0900, while subsequent swing highs point to former resistance at 1.0820 as a potential price floor. Needless to say, price remains in heavily oversold territory and at clear risk for pullback. Yet it is imprudent to sell into such strong downward momentum, and we favor waiting for consolidation before calling for a bigger turn.

US Dollar / Swiss Franc

The USDCHF has surpassed our bearish expectations and broken below a long-standing uptrend line in the process. Price currently trades at relatively minor Fibonacci support at the 78.6 percent retracement of the 1.0360-1.1970 move, and further price floors don’t come into place until likewise minor swing-lows at 1.0610 and 1.0485. That being said, price remains very heavily oversold and price is at clear risk for noteworthy reversal. Yet it remains imprudent to buy into such overwhelming weakness.