Technical Update - Correction time in EURUSD, GBPUSD and Dollar Index Technical Update - Correction time in EURUSD, GBPUSD and Dollar Index Technical Update - Correction time in EURUSD, GBPUSD and Dollar Index

Technical Update - Correction time in EURUSD, GBPUSD and Dollar Index

Forex 3 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  EURUSD is bouncing from strong support at around 1.05. Could move to 1.0663, possibly higher before down trend likely to resume

GBPUSD forming bottom and reversal pattern indicating a bounce to 1.2353 , possibly testing 200 daily Moving Average

Dollar Index running out of steam and is back below key level at 105.80. Correction down to 104.39 in the cards

EURUSD has been in a downtrend for the past two months. But now a correction seems to be unfolding.

EURUSD has reached the strong support area around 1.0515-1.0480. RSI closed yesterday below 25 i.e., in oversold territory.

If RSI is closing above its upper falling trend there is great likelihood of a EURUSD correction to test the upper falling trendline and the 0.3825 retracement at 1.0663.
However, if EURUSD is closing above the upper falling trend line a correction could continue all the way up to the 0.618 retracement at around 1.0775

If EURUSD is closing this Friday above 1.0635 it has closed the week, the month and the quarter above a key resistance level. That could lead to the weekly RSI closing back above 40 meaning it would still be in positive sentiment.
If EURUSD is failing to close above 1.0635 today – the end of the week and month - the downtrend is still in play on all time periods.

If EURUSD closes below 1.0480 there is no real strong support until around 1.0240. Minor support at around 1.0438

eurusd d 2909
Source all charts and data: Saxo Group
eurusd w 2909

GBPUSD formed yesterday a Bullish Engulfing candle. A fairly rare occurrences in daily FX and since FX is an OTC market it is not the most reliable one. However, the power between Sellers and Buyers has shifted and GBPUSD in in for a correction.

A short-term correction up to the 0.382 retracement at around 1.2353 is likely but a spike up to the 200 daily Moving Average should not be ruled out.

RSI is still showing negative sentiment and if it gets rejected at the 40 threshold the bearish trend is likely to resume.

If that scenario plays out GBPUSD is likely to move towards the 1.20 support

Weekly chart RSI closed last week below the 40 threshold i.e., showing negative sentiment medium-term. That is an indication of further downside after a correction. But for now the 545 weekly Moving Average is providing support

gbpusd d 2909
gbpusd w 2909

Dollar Index closed above strong resistance at around 105.80 and moved higher to the 1.764 projection at 106.37 before the Buyers got exhausted.

The Dollar Index is at the time of writing back below the key level at 105.80. IF breaking below lower rising trendline a correction down to around 104.39 could be seen

If closing the week below 105.80 the weekly chart could be forming a Shooting Star top and reversal candle. If that scenario plays out we are likely to see a correction to a least 104.39 possibly lower.

However, RSI on both daily and weekly is showing positive sentiment regardless of where the Index is closing the week. That is indicating likely higher levels after a correction.

If closing back above 105.80 there is no strong resistance until around 107.70-107.90

usdindex d 2909
usdindex w 2909


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.