FX snapshot: US Dollar Basket, EUR/USD, AUD/USD, GBP/JPY

The dollar sells off following a fake out, sending EUR/USD and AUD/USD higher. Elsewhere, GBP/JPY has hit a 12-month trend line, bringing about a bullish outlook.

USD/JPY
Source: Bloomberg

Dollar Index attempts to break lower once more
The Dollar Index is once more selling off this morning following yesterday’s false dawn after price failed to close below 94.74. However, price came perfectly up to the 95.09 resistance before selling off once more. Hopefully will see this selloff hold, in which case I would expect further downside to push back towards the key 94.20 support level. There are no signs this selloff is set to end yet and thus I remain bearish while price remains below 95.09.

EUR/USD continues charge towards $1.146
EUR/USD is moving higher once more this morning, breaking out of the triangle seen yesterday. The pair is clearly trading in a more consistent manner and as such, I feel more confident regarding direction going forward.

Ultimately the next major resistance level to watch out for is $1.146 (21 September high). I will remain bullish unless price moves below $1.1344.

AUD/USD bounce likely to be short-lived
Yesterday’s flag breakdown played out perfectly, with AUD/USD falling over 100 points in the following 12 hours. However, this morning has seen the pair retrace a significant amount of that. Price is currently breaking above the $0.7254 level, which represents a key support level from yesterday.

However, despite this break, I remain bearish and would expect to see this turn lower once more in the near future. Another level which could possibly provide the resistance needed to send this chart south again is $0.728, which represents the 21 September peak. Ultimately I remain bearish while price remains below $0.7303.

GBP/JPY trend line bounce could signal good trend to follow
GBP/JPY yesterday bounced higher from a long-term trend line originating from October 2014. We have seen such bounces occur a number of times in the past and has previously brought about anything from a 300 to 2100 point upside.

For now, I will be continuing to expect new highs and higher lows on the short-term charts. Thus I am bullish while price remains above Y182.34, with the next resistance level to watch out for coming at Y183.40.

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