Many US dollar pairs have been consolidating, yet USD/CAD and USD/JPY are showing early signs of a return to their trends of dollar strength.

Yen and US dollar notes
Source: Bloomberg

EUR/USD consolidates further

EUR/USD has been consolidating for a week now, with the attempted breakout on Thursday selling off from horizontal and SMA resistance. The strong downtrend coming into this current sideways price action means further selling is likely to be the resolution of this current price action. However, a clear break and close out of this range is needed to gain confidence that the trending market will resume once more. Thus a close below $1.0674 would look towards $1.052 as the next major support level, whereas a close above $1.0833 would point towards $1.0897 as the next major upside resistance.

GBP/USD topping off?

GBP/USD is also consolidating, with the price falling back from the Friday high of $1.5266 and has created two successive lower highs on the hourly chart.

The $1.5191 support level (50% retracement) is providing clear near-term support, yet for a bearish outlook, the $1.517 level must be broken. Should that occur, $1.5107 is the next notable support level. Alternately, a close above $1.5241 would be a clear bullish development given that we have failed on four occasions now. Should that occur, the $1.5266 and $1.5289 levels are the next ones to watch. Until we see either of these, the $1.5191-$1.5241 range is likely to persist.

USD/CAD to trend again?

USD/CAD has previously been a big trender, with 2013 and 2014 providing clear upward direction, which makes things easier for traders. However, 2015 has been significantly choppier. On the shorter term, we have seen the price largely sideways over the past week, yet with it apparently creating new highs and higher lows, there is the potential that we could see the bullish trend come back into play.

Trendline support appears to be pushing the price towards a resurgence this morning and unless it breaks below C$1.3267, the bullish outlook remains, with levels of C$1.3336 and C$1.335 the next major resistance points in view.

USD/JPY breakout?

USD/JPY has been trading within a descending channel over the past week, following a strong rally. The bullish entry means a similar upside exit is expected to occur.

With the price currently attempting to break through trendline resistance, a bullish trend could return once more. A close above ¥123.00 would be a bullish signal, where ¥123.50 and ¥126.60 would be the near-term resistance levels in view. The fact that the stochastic is creating higher highs and lows is a signal that bullish momentum could be leading the price here.

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