FX snapshot: US Dollar index, GBP/USD, USD/JPY, USD/CAD

GBP/USD is at a crucial crossroad while the Dollar Index finds a rare cluster of reliable moving averages.

Source: Bloomberg

US Dollar Index hits key support
The Dollar Basket has come into a rare cluster of simple moving averages support, with the 50-, 100-, and 200- all congregating in a very tight range between 9593 and 9597. All three of these moving averages have been notable in the past and thus the bounce we are currently seeing should not come as a surprise.

With the stochastic and MACD histogram rolling over in a bullish manner, a move higher seems likely. The key resistance level to watch out for is at 96.26 which needs to be broken to lead us to a stronger move higher. The inability to regain that level would simply make any bounce look like a short-term phenomenon, and would point towards a move to the double-top neckline of 95.58.

GBP/USD awaits break
GBP/USD has broken down to the $1.517 support level over the past week and where we go from here is going to be decided at this crucial level. The creation of a short-term symmetrical triangle points to indecision at this level.

I am not necessarily looking for a break of the triangle as a signal but instead will need to see a 1-hour or 4-hour candle close above $1.5421 (bullish) or below $1.5135 (bearish) to spark the next move.

A downside break would point towards a sharp selloff towards $1.5 in my opinion, whereas a break back towards the upside would look towards $1.55 levels.  

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USD/JPY spikes off Y119.22 support level
USD/JPY is spiking higher once more as it continues to be largely range bound. Of the levels that have been respected within this range, the $119.22 support has been most reliable and this is where price has spiked higher from this morning.

Ultimately I would need to see price retake the Y120 handle to give me confidence that we will see a move back towards Y121. However, as a preliminary signal, this huge bullish engulfing certainly looks like the beginning of a bullish reversal to continue this range. 

USD/CAD begins to trend once more
USD/CAD was once of the most consistent performers back in the second-half 2014, yet the first-half of 2015 has not been as kind to traders, with a more choppy and unpredictable market coming into play. However, the signs are there that we are moving into a more consistent uptrend like that seen in 2014 which can only be a good thing.

The trend is your friend and on this occasion the trend is to the upside. Pullbacks tend to find support around the 20-period SMA (4-hour) and thus any move lower would be expected to find a bounce around that indicator, which also corresponds with the C$1.3353 support level currently. 

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