FX snapshot – US Dollar Index, EUR/USD, GBP/USD, EUR/GBP

EUR/USD weakness pushes the Dollar Index higher, while EUR/GBP sells off strongly once more.

A pound coin atop a euro note
Source: Bloomberg

US Dollar Index trending higher

EUR/USD strength has pushed the Dollar Index higher, with new found support at $97.33. The creation of new highs and higher lows is new expected to continue, with price action confirmed by the stochastic oscillator. As the stochastic turns higher, the price too is expected to push higher, with $97.69 and $98.05 the two near-term resistance levels in view. Any move lower is likely to be capped by $97.33.

Dollar Index chart

EUR/USD weakness expected

Yesterday saw EUR/USD break below key support at $1.1005 to bring about a renewed bearish outlook. A strong trend lower ensued, only to be followed by a period of overnight consolidation. The price is currently seeking to break lower, which I see as the most likely event. The clearest indicator would be a close below $1.0936 which then points towards a move back to $1.0897 and $1.0819 support levels. The bearish view would remain unless the price closes back above $1.0969.

EUR/USD chart

GBP/USD awaiting signal

A very strong selloff yesterday saw the GBP/USD break back to the 200-hour SMA support. However, the recovery since has brought the it back above $1.5415 support. As such, we need to watch for the resolution of the current position, where a closed candle above $1.544 would point towards gains with $1.5467 in sight. Alternately, a close below $1.5412 would bring a high likeliness of a selloff back down towards $1.538.

GBP/USD chart

EUR/GBP downtrend continues

EUR/GBP continues to selloff, with the price breaking below £0.7102 support this morning. A clear downtrend is in play and thus further losses are to be expected. The next key support level in view is £0.7026 as the pair attempts to regain the July low of £0.6936. Near-term resistance levels to watch are £0.7106 and £0.7115.

EUR/GBP chart

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