Technical Update - EURUSD, USDCHF and Dollar Index. Break out of Friday's volatile trading range key for direction Technical Update - EURUSD, USDCHF and Dollar Index. Break out of Friday's volatile trading range key for direction Technical Update - EURUSD, USDCHF and Dollar Index. Break out of Friday's volatile trading range key for direction

Technical Update - EURUSD, USDCHF and Dollar Index. Break out of Friday's volatile trading range key for direction

Forex 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Trading Friday was extremely volatile in Dollar pairs and of course also for the Dollar Index. However, the day ended at the same price levels as it started. Now, direction is likely determined by the break out of that trading range.
Check out the trading ranges and likely break out directions


EURUSD Friday spiked down to the 0.618 retracement of the December bull move at 1.0882. It is also the 0.382 retracement of the entire uptrend since October 2023, and test of the lower rising trendline.
There was – and still is – divergence on the RSI during the End-December bullish move suggesting exhaustion of the uptrend. However, if EURUSD is breaking above the peak of the very volatile Friday at 1.10 the RSI is set to break back above the 60 threshold possibly also back above its falling trendline thereby likely to cancelling the RSI divergence.

If that scenario plays out EURUSD is likely to test and take out the December peak at around 1.1140 with a potential move to 1.1275

A break below 1.0880 could see a swift sell-off down to the 0.786 retracement at around 1.0812. The rising 55 and 200 Daily Moving Averages will provide support int that region.

If 1.0880 is taken out a spike down to strong support at around 1.0730 should not be ruled out
Source all charts and data: Saxo Group

USDCHF rebounded to the 0.50 retracement at 0.8576 Friday Similar to EURUSD and Dollar Index the price range of Friday’s volatile market is the range that needs to be broken.

A break above 0.8576 USDCHF is likely to move higher to 0.8634 – the 0.618 retracement - possibly to the 0.786 retracement at 0.8716 and the upper falling trendline

A bearish break of the range i.e., below 0.8455 USDCHF is likely to test the December low around 0.8332 and likely lower

RSI divergence is indicating the October-December bearish trend has exhausted and USDCHF is to rebounding higher from current levels

The Dollar Index Friday spiked to the 0.618 retracement at around 102.76 only to collapse again

The Index could be caught range bound between peak and trough of Friday volatile market i.e., between 102.83 and 101.62.
If the Dollar Index is taking out the peak at 102.83 expect a move to the 0.786 retracem4ent at 103.42. A break below 101.62 the Dollar Index is resuming downtrend with downside potential to 101-100.32.

An RSI close above 60 threshold will confirm uptrend. A close below 40 will confirm the Dollar Index is resuming downtrend 
Disclaimer

The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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 (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.