FX Snapshot – US Dollar Basket, EUR/USD, GBP/USD, NZD/USD

The dollar is in view ahead of the US jobs report, with EUR/USD, GBP/USD and NZD/USD all selling off. Yet with key support in play, could we see a bounce?

Pound and dollar
Source: Bloomberg

US dollar boosted pre-NFP

The US Dollar mandje has been experiencing a positive week, since moving higher from an ascending trendline support. One of the key resistance levels to watch has now been broken at $98, with price now finding support for a likely next leg higher.

As such, this looks a lot like a short-term consolidation within an uptrend and thus further upside is expected (non-farm payrolls permitting) with another major resistance ahead at $98.61 which if broken would form a six-month high.

Downside support is found at $98.00, which if broken would look towards trendline support (currently $97.77). 

EUR/USD in key zone

EUR/USD has sold off heavily ever since Mario Draghi jawboned the single currency lower last week. Price has since moved back to the $1.0819 support (May and July lows) and as such there is a possibility of a bounce.

With clear resistance at $1.0897, the breakout from this zone will determine the direction of this pair.

A break above $1.0897 would look towards resistance at $1.1 and $1.1044, whereas a closed candle below $1.0819 would look towards the next support level of $1.052 and $1.0462.

BoE drags GBP/USD lower

Yesterday’s Bank of England meeting provided GBP/USD with the biggest afternoon of selling since May.

As such, price has been brought back to the crucial $1.517 support level (June and September lows) which along with $1.5107 form the two main barriers to further selling. The outlook on pure price action looks bearish, yet it is worth being aware of a potential retracement at these levels.

The key resistance level to watch would come at $1.5241.

NZD/USD bounces from trendline

NZD/USD has bounced from trendline support, as the market attempts to regain some of the losses seen through November to date. The short-term trend certainly is towards the downside, yet with price currently finding support from both ascending and descending trendlines, there is a possibility that we could see it turn north once more.

As such, a move back through the trendline would likely signal another leg lower, whereas a bounce and close through $0.6645 could signal a period of strength back towards $0.6698 and trendline resistance zone.

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