Technical Update - EURUSD and Dollar Index likely to be breaking deadlock shortly. GBPUSD correction probably not over Technical Update - EURUSD and Dollar Index likely to be breaking deadlock shortly. GBPUSD correction probably not over Technical Update - EURUSD and Dollar Index likely to be breaking deadlock shortly. GBPUSD correction probably not over

Technical Update - EURUSD and Dollar Index likely to be breaking deadlock shortly. GBPUSD correction probably not over

Forex 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  EURUSD bullish break of 1.0825 or bearish break below 1.0720?
Dollar Index key support at 103.22. Key resistance at 104.40
GBPUSD looking heavy indicating correction is not over just yet. Support at 1.2445 could be key


EURUSD yesterday tested the resistance at around 1.0825, spiking just a few cents above. Another break above is likely to fuel a rally with short-term potential to the 0.618 retracement of the current correction at 1.09 but with medium-term potential back to 1.10.

If EURUSD on the other hand is breaking below last week’s low at 1.0720 a spike down to the 0.618 retracement at 1.0665 could be seen. The rising 55 DMA will provide support however.

The RSI is still showing positive sentiment indicating the break out is likely to be to the upside

 

Source all charts and data: Saxo Group

The Dollar Index is caught ranger bound between 104.40 and 103.22. Break out is needed for direction.
A bearish break out and the Dollar Index is resuming down trend with potential down to 102-101.62 support.

A break above 104.40 could see a swift rally to the 0.618 retracement at 105.23. The declining 55 DMA will however, provide overhead resistance limiting an uptrend.

A break above last week’s peak at 104.27 would be an early warning of a bullish break out.

However, RSXI is in negative sentiment with no divergence indicating the Dollar Index is more likely to break out bearish

GBPUSD is still in a correction phase. A correction that could continue to testing the 1.2445 support. A close below is likely to send GBPUSD aka “Cable” lower towards the 0.6518 retracement at 1.2323.

The rising 55 DMA will provide support however, limiting the downside potential. RSI is also still showing positive sentiment.

If GBPUSD is taking out Tuesday’s peak at 1.2616 the strong resistance at around 1.2745 is likely to be tested once again

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