FX snapshot – Dollar Index, GBP/USD, USD/JPY, AUD/NZD

US dollar resurgence is on the cards, with GBP/USD and USD/JPY likely to feel the consequences. 

Japanese Yen notes atop of US dollar notes
Source: Bloomberg

US dollar moves into more bullish phase

The Dollar Index has seemingly turned around despite beginning a downward trend last week. The failure to break below $95.07 yesterday followed by the break above $95.62 brings a more bullish light to the currency, and thus I believe we are going to see a more bullish phase leading into the FOMC announcement.

The creation of continued higher highs and higher lows will be the key here, and so far we have continued to see that happen. I am bullish as long as the price does not fall below $95.57. However, I am also aware that the $95.93 level represents a previously notable support level, and thus we could see a short-term retracement lower. 

Dollar Index chart

GBP/USD spikes yet remains bearish, for now

GBP/USD has spiked higher today following a great set of jobs numbers out of the UK. However, this comes amid a pattern which clearly looked like it was going to see further losses for GBP/USD. There is clearly a strong degree of bullish sentiment given the maribuzo candle being formed. However, Until the price breaks above $1.546, I remain bearish for a move back below $1.533. With that in mind, I am watching for intraday bearish reversal signals below $1.546, where a break higher would look to $1.5477 as the next resistance point.

GBP/USD chart

USD/JPY attempting to break through trendline

The USD/JPY pair failed to create a particularly strong leg lower today, and that could be a sign that the trend lower seen over the past three trading days could be about to reverse. The break above the ¥120.42 trendline resistance would be notable, but I await a break above ¥120.50 to become more bullish. Until that happens I remain bearish for a continuation of this recent broadening formation.

USD/JPY chart

AUD/NZD bounces higher from triangle top

The AUD/NZD pair has been looking increasingly bullish, since the breakout from a triangle formation. However, as expected the NZD$1.1304 - NZD$1.1317 zone provided resistance for a move lower. However, we have since seen a bounce from the triangle top and are likely to see the price break through resistance at the second time of asking. As a result, I am bullish and believe we will break through NZD$1.1317 and on towards the next resistance level at NZD$1.138 in the near future.

AUD/NZD chart

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