US Dollar Reversal Gathering Pace

Talking Points:

– Both EUR/USD and USD/JPY have topsy-turvy neatly in new days, nonetheless conjunction has reached vicious levels to contend their trends have changed…yet.

– On a other hand, AUD/USD, GBP/USD, and NZD/USD have all started to or seem to be on a verge of some-more poignant technical breakdowns.

Retail throng positioning is easing again now that a US Dollar is holding behind a new losses.

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It appears that cost movement during a finish of final week and a commencement of this one can be characterized as a washout, or depletion low, for a US Dollar. After 3 clever days of upside action, a doubt has arisen again, ‘is this a US Dollar bottoming process?’

Chart 1: DXY Index Daily Timeframe (July 12 to Aug 31, 2017)

US Dollar Reversal Gathering Pace - Key Levels to Watch

As we have finished previously, it’s best to let a marketplace foreordain when it’s trend annulment is going to take place. After a outward engulfing bar on Aug 25, a DXY Index now needs to transparent 93.44 before we can contend with certainty that a near-term bottom has been established. Concurrently, a tighten by 93.44 would also consecrate a mangle of a daily 21-EMA, that a DXY Index hasn’t sealed above given Jun 27.

Chart 2: EUR/USD Daily Timeframe (July 12 to Aug 31, 2017)

US Dollar Reversal Gathering Pace - Key Levels to Watch

The same can be pronounced about EUR/USD (no warn given that DXY and EUR/USD are fundamentally counterpart images). Price movement has been weaker in new days, though it’s still too shortly to contend that a tip is in place. Like DXY, EUR/USD hasn’t sealed on a other side of a daily 21-EMA given a finish of June. Several tests of a pivotal relocating normal occurred via August, though were impotent in their attempts to mangle lower. It’s probable that this time is opposite – generally if tomorrow’s Aug US Nonfarm payrolls news comes in as clever as information forward of time suggests it might be.

See a above video for technical considerations in a DXY Index, EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD, and Gold.

Read more: Price Action is Promising, though US Dollar Reversal Not Set in Stone

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

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