Technical Update - Correction in EURUSD & Dollar Index. Key levels to be tested
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: EURUSD and the Dollar Index have both retraced 0.382. Dollar Index trading around the strong resistance at 100.68
A 0.618 Fibonacci correction should not be ruled out
EURUSD correction is unfolding and is close to test the 0.382 retracement at around 1.1107. A break below below 1.11 could fuel further selling pressure down to the 0.618 retracement at around 1.10 before the uptrend is likely to resume.
If EURUSD drops to close below 1.0830 the uptrend both short- and medium-term has been reversed.
After heavy selling last week the Dollar Index Future is rebounding and is at the time of writing breaking back above strong resistance at around 100.68 to the 0.382 retracement at 100.77.
A correction to the 0.618 retracement at around 101.73 is not unlikely and will not jeopardize the medium-term bearish picture. A close above 103.30 is needed for that.
There is strong resistance at around 102.50. All daily Moving Averages are declining underlining the underlying bearish sentiment.
RSI still showing negative sentiment and needs to close above 60 to reverse that
Latest Market Insights
Outrageous Predictions 2024
The end of the road
The end of the road
World hit by major health crisis as obesity drugs make people stop exercising
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
The end of capitalism in the USA
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
Generative AI deepfake triggers a national security crisis
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
Deficit countries form ‘Rome Club’ to negotiate trade terms
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
Robert F. Kennedy Jr wins the 2024 US presidential election
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Japan’s ‘lucky 7%’ GDP growth rate forces BoJ to abandon yield curve control
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
Luxury demand plunges as EU goes Robin Hood, introducing wealth tax
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.