Dollar remains king

28 October, 2016

Dollar remains king

The mounting expectations over the Federal Reserve raising US interest rates in December have inspired bullish investors to send the Dollar Index to fresh eight-month highs at 99.00. This Index remains heavily bullish on the daily timeframe as there have been consistently higher highs and higher lows. Prices are trading above the daily 20 and 200 SMA while the MACD points firmly to the upside. Previous resistance around 98.00 could transform into a dynamic support which encourages a further incline towards the psychological 100.00 level.

GBPUSD breakdown pending

The persistent hard Brexit fears have left the GBPUSD vulnerable to heavy losses. This pair is heavily bearish on the daily timeframe as the candlesticks are trading below the daily 20 SMA while the MACD has crossed to the downside. For three straight trading weeks, prices have oscillated between 200 pip range with pressure building up. A breakdown below 1.2100 could catalyse a further decline towards 1.1800 in the medium term.

EURUSD fundamentally bearish

The expected divergence in monetary policy between the European Central Bank and Federal Reserve has made the EURUSD fundamentally bearish. With consistently lower lows and lower highs on the daily timeframe the pair also fulfils the prerequisites of a technical bear trend. What most bearish traders are observing on the EURUSD is when the technical bounce comes to an end. Prices may trade towards the 1.1000 resistances or breakdown below 1.0850 with targets stretching towards 1.0500.

USDJPY bulls make an appearance

The USDJPY is turning increasingly bullish on the daily timeframe with the breakout above 105.00 potentially opening a path higher towards 106.00. Dollars resurgence amid renewed rate hike hopes remains a key driver behind the USDJPY upsurge with further inclines expected. From a technical standpoint, prices are trading above the daily 20 SMA while the MACD has crossed to the upside. Previous resistance around 105.00 could transform into a dynamic support for a further upsurge towards 106.00.

EURGBP parity dream…

Sterling weakness from the persistent hard Brexit concerns may be the engine which ensures the parity dream on the EURGBP is achieved. From a technical standpoint, the pair still remains bullish on the daily timeframe with the 0.8900 support providing protection for the bulls. A breakout above 0.9000 could provide buyers enough momentum to send the EURGBP towards 0.9150. 

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