Technical Analyst, Saxo Bank Group
Summary: EURUSD in downtrend eyeing 1.03. Dollar Index rejected at resistance but set to move higher. USDJPY struggling at resistance seems ready for a minor correction before uptrend resumes
EURUSD bounced off 0.618 retracement at 1.0532. Still below 21 and 55 daily Moving Average and RSI is in negative sentiment strongly indicating lower EURUSD.
A move down to the 200 daily Moving Average around 1.03 possibly dipping down to strong support at around 1.0220 is in the cards. Minor support at 1.0481
A close above 1.0805 will reverse the downtrend.
Dollar Index was rejected at the 0.618 retracement but the trend is up with the RSI in positive sentiment and no divergence. Minor correction could be over and the Dollar Index could be set for another leg higher.
A move that is likely to take the Index to the 0.786 retracement and the 200 daily Moving average around 106.35.
For the Dollar index to reverse the uptrend a move below 102.39 is needed.
USDJPY is struggling to close above the 0.382 retracement at 136.53 after testing it for the past four days. Both 100 and 200 daily Moving Averages are adding to the resistance area. USDJPY has formed a rising wedge like pattern indicating we could see a correction after the February bullish move. A correction is in the cards but a correction might bit small, possibly only down to 0.382 retracement and support around 132.90 possibly dipping down to the 55 daily Moving Average before bull trend is likely to resume. RSI is positive supporting the bullish outlook.
A bearish break of the lower rising trendline will be first indication of a correction scenario to play out.
If USDJPY breaks bullish out of the Rising wedge the pattern is demolished with further upside to be expected.
Resistance at around 137.85 and 142.25
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