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Daily Market Analysis and Forex News

Mid-Week Technical Outlook: G10 Currencies Smile As Dollar Weakens


The past few days have been rough for the dollar.

It has weakened against every single G10 currency this week as investors cut bets on how aggressive the Federal Reserve may be when raising interest rates in July. The upbeat market mood has also dulled appetite for the safe-haven currency as market players eye stock markets and riskier currencies.

We have seen the Dollar Index (DXY) dip below the 106.50 level, essentially signalling the end of the bullish trend on the daily charts. If the downside momentum holds, prices could test 105.50 and lower which drags the dollar back into a range with the next key support at 103.30.

A similar scene can be observed on the equally weighted dollar index with prices approaching the 50-day Simple Moving Average. The trend is turning bearish with the next key support found at 1.1700. A solid breakdown below this level may trigger a decline towards 1.1630.

Can EURUSD keep above 1.0200?

After dipping below parity last week, euro bulls have fought back to drive prices out of the danger zone.

The currency pair has jumped over 150 pips since Monday with prices trading around 1.0230 as of writing. Given how a daily close above 1.0200 has been secured, the next key level of interest can be found at 1.0350 and 1.0480. Should 1.0200 prove to be unreliable support, a decline back towards 1.0130 and 1.0000 could be on the table.

Time for GBPUSD to resume downtrend?

Pound bears could re-enter the scene if 1.2060 proves to be a reliable resistance level. There have been consistently lower lows and lower highs while the MACD trades below zero. A decline back towards 1.1900 could open the doors towards 1.1760 and 1.1650, respectively. If prices can break above 1.2060, the next key level of interest can be found at 1.2350.

AUDUSD set to push higher?

The solid breakout and daily close above 0.6850 places Aussie bulls in a position of power. Although the MACD trades below zero, prices have punched above the lower high – marking an end to the bearish trend on the daily timeframe. Previous resistance at 0.6850 could transform into support, that encourages an incline towards the 50-day Simple Moving Average at 0.6970 and 0.7050, respectively.

USDJPY hovers around multi-decade highs

Prices remain firmly bullish on the daily charts. A technical throwback towards 136.000 could trigger an incline back towards 139.380. Alternatively, a strong daily close above 139.380 may open the doors towards 140.00 and higher. Should the 136.000 give way, the USDJPY could test 134.00.

NZDUSD gearing for a rebound?

Things are looking interesting for the NZDUSD. After punching above 0.6220 this morning, the next key level of interest can be found at the 50-day Simple Moving Average. Beyond this level will be key resistance at 0.6375. Should 0.6220 prove to be reliable resistance, a decline back towards 0.6100 could be on the cards.

USDCAD gearing for a major breakdown?

A picture says 1000 words. Soo much is going on with the USDCAD but one thing is striking. Prices wobbling above the 1.2860 support level which is above the 50, 100, and 200-day Simple Moving Averages. A solid breakdown below this point could encourage a selloff towards 1.2650.  Should 1.2860 prove to be reliable support, prices could rebound back towards 1.3050.

USDCHF wobbles above 0.9650

A weaker dollar has dragged the USDCHF below the 50-day Simple Moving Average. Prices remain choppy but bears could gain ground if a daily close below 0.9650 is achieved. Under this level, the next key level of interest can be found at 0.9500. Should 0.9650 prove to be reliable support, the USDCHF could experience a rebound back towards 0.9850.


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