Forex Video Briefing (8/21) – USDX, USD/JPY, EUR/USD
The 1H USD Index chart shows a bullish market this week, after it broke above last week’s consolidation high at 81.70. After stalling at 82.36, it has come down to test a rising trendline and has cracked it. However, price remains above the 50-hour SMA, and the 1H RSI is still above 40. This means the trend, and momentum is still bullish despite the broken trendline. We can probably expect support here around 82.05-82.10, a previous resistance, and the 50-hour SMA, especially with the 1H RSI around 40. There is upside risk back to the 82.36 high, and also the 82.67 resistance pivot from Sept. 2013. If price dips below 82.00, and the 1H RSI below, we should expect a deeper correction, but we should expect buyers again around 81.70, last week’s consolidation resistance.
The EUR/USD found support at 1.3242. So far the rally has brought the pair back to the 1.3280-90 area. This area is reinforced as resistance by a falling trendline and the 50-hour simple moving average. Furthermore, the 1H RSI is approaching 60. If it stays below 60, the bearish momentum is maintained. So, this is where we can expect sellers. Look for price to come back to test the 1.3260, local support/resistance pivot, then the 1.3242 low on the week. The next key support below 1.3240 could be the 1.31-1.3105 lows from Sept. 2013. If price can push above 1.33, then we should probably shelve this bearish outlook for at least the short-term in consideration of a possible consolidation/correction pattern brewing.
The USD/JPY rallied above a resistance around 103 this week, and is now testing the next resistance pivot around 104, as you can see on the daily chart. So far, there is some resistance, as the USD gives back some gains, but the bulls are still in charge even in the 1H chart. As you can see, traders are keeping USD/JPY elevated after a brief bearish attempt. The chart would look bullish even if price dipped to 103.40, and the 1H RSI back to 40. In any case, the upside remains strong and if the pair can break above 104.15, it will open up the 2014-high at 105.44.