FX snapshot – Dollar Index, EUR/USD, AUD/NZD, USD/CAD

As currency markets unravel some of the moves seen earlier in the week, dollar strength seems likely for now.

Source: Bloomberg

Dollar eases within uptrend
The dollar continues to move higher, following the selloff seen earlier in the week. The latest consolidation seen overnight has respected the 1-hour simple moving average closely as support, which makes it a likely source of the next move higher. In the short-term another leg higher seems likely.

However, as long as price remains below 97.32, I feel we could see another move lower given the creation of a low below 93.17 this week. I have not seen the signs of a reversal lower yet and therefore the bullish outlook remains.

EUR/USD downtrend expected to return at $1.129
Another story of unwinding the moves we saw earlier in the week, with EUR/USD gradually moving lower. However, the moderate gains seen overnight have only sought to bring us back towards a good resistance level that could spark the next leg lower.

I expect to see the bears come back into play between $1.128 and $1.129 to push price onto the next leg lower past $1.12.

AUD/NZD in a pivotal zone to determine direction
AUD/NZD is pushing back towards the NZ$1.11 resistance level, which has been absolutely pivotal to price action throughout the past month. Typically a 4-hour close above or below NZ$1.11 should set the direction of trade. On this occasion, given that we are attempting to break higher, I would need to see a close above NZ$1.11 to become more bullish.

Until then, I will simply look for signs that we are reversing lower once more. The key to that would be a failure to move above the NZ$1.105 set yesterday, followed by a move to NZ$1.106 which would be my bearish indicator. 

USD/CAD falls due to spike in crude prices
USD/CAD has been pulling back as oil prices begin to recover this week. We have seen a bounce this morning, yet price has now returned to the 20-hour SMA which has typically been the source of each respective selloff.

The C$1.3156 support level is a likely area for the pair to move back into in the short-term. This bearish view holds unless price moves back above C$1.3247.

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