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.

EUR/USD
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.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.