More Room for Downside in the US Dollar

More Room for Downside in the US Dollar

By: Oliver Miller | Where To Trade | On:16-10-2014 23:42
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Key Highlights

  • US dollar failed to capitalize and moved lower against almost all major currencies except the Japanese yen.
  • British pound turned out to be the best performer of the day against the US dollar.
  • Euro pulls off a close above the 1.2800 level, which is a positive sign in the short term.
  • EURAUD looks for more downside as buyers fail to take it higher.
  • USDJPY might fall one more time as the market sentiment started favoring sellers.

 

USDJPY

The US dollar slowly grinded higher against the Japanese yen, but it failed to break an important bearish trend line on the hourly chart. There are two bullish signs to note as of now. First, the RSI has closed above the 50 mark, and second is that the MACD indicator has changed the slope from bearish to bullish. However, the most important thing is the momentum. The USDJPY pair seems to be lagging momentum, which can result in a move lower. Currently, the pair is testing the 50% fib retracement level of the last fall from the 107.45 high to 105.21 low. So, there is a chance that the pair might fail around the current levels and move lower again. On the upside, the mentioned bearish trend line remains a hurdle for the pair.

Intraday Support Level – 105.70

Intraday Resistance Level – 106.50

  • Overall, as long as the pair stays below the trend line it remains at risk of losses.
  • Buyers need to break the highlighted trend line for a push towards 100 MA.

 

Where To Trade - USDJPY - 17.10.2014

 

Alternatively, if the AUDUSD pair settles below above the highlighted bearish trend line, then the 100 hourly moving average might be tested in the short term where sellers could appear again.

 

EURAUD

The Euro managed to gain ground against the US dollar recently, but it was seen struggling against the Aussie dollar. There was a bullish trend line formed on the hourly chart of EURAUD pair, which was broken. The pair tested the broken support trend line, but failed to overtake it as it acted as a resistance later. There were more than 4 attempts to clear it again, but of no avail. The pair is now heading lower probably towards the 100 hourly moving average, which is sitting below the 61.8% fib retracement level of the last leg from the 1.4453 low to 1.4701 high. The hourly RSI has closed below the 50 level, which might push the pair lower in the short term. It would be interesting to see how the Euro buyers react around the 100 MA.

Intraday Support Level – 1.4530

Intraday Resistance Level – 1.4620

  • Selling rallies around the 1.4620-40 area looks like a good option.
  • 100 MA might act as a support and contain the downside in the EURAUD pair.

 

Where To Trade - EURAUD - 17.10.2014

 

A break and below the 100 MA could ignite more losses in the EURAUD pair which might take it towards the 200 MA. The Euro sellers just need a reason for a rally, which is unlikely to happen today.

Oliver Miller

Oliver Miller

"Patience is the key for success"

Oliver Miller is one of the best financial analyst with 18 years of online trading experience

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