Dollar higher was the theme last week. What about in the new trading week?
The US dollar was higher against all the major currencies last week. The biggest gains were verse the CHF, NZD and EUR with the dollar up about 1% versus each of those currencies. The dollar reached new highs for the year vs both the EUR and the GBP.
What are the technicals saying for each of the major currencies vs the USD heading into the new week. Maybe more importantly what moves to the downside for the greenback might be a clue for more corrective price action?
EURUSD:
The EURUSD traded to a new low (high USD) on Friday at 1.14323. In the process, the pair moved below the 50% midpoint of the 2020/2021 trading range at 1.14892. That level was broken on Wednesday and stayed below on Thursday (the high on Thursday had sellers against the level at 1.14869). Moreover the high for the week stalled between 1.1601 and 1.1611. Those levels corresponded with swing lows from September 2020 and November 2020. So to key levels held resistance, increasing the bias tilt to the downside in the process.
SO in the new trading week it makes sense that those levels will be risk/bias defining levels for the pair. Stay below the 50% retracement at 1.14892 and the sellers remain in firm control. The prices currently trading at 1.1448. Move above and stay above should see further corrective action, but it would take a move above the 1.1601-1.1611 to hurt longer term sellers.
PS. the low from September at 1.1523 and the low from November 5th at 1.15125 will be an interim hurdle close close to the 50% retracement level that would give buyers some added confidence.
PSS Stay below the 50%, move below 1.1424 and the door remains open for more downside momentum with a lower trend line at 1.1318 and 61.8% at 1.12876 as targets.
USDJPY
The sellers had their shot this week. On Tuesday, the price fell outside of the Red Box that had confined the pair going back to mid-October (and also below the 38.2% of the move up from October 4 low. That level came in at 113.21. On Wednesday, the price raced back higher and in the process moved back into the Red Box, above the 100 hour MA (blue line) and the 200 hour MA (green line). Getting above each level increased the bullish bias for the pair. The price has not moved back below the 200 hour MA.
The high price for the week reached 113.27 on Friday. That high stalled in a swing area between 114.203 and 113.307. Sellers leaned against that level and the price moved lower into the Friday close.
In the new trading week, the swing area between 114.203 and 114.307 will be the upside target to get to and through if the buyers are to keep firm control. If the price can get above that level, the 114.457 to 114.544 swing area will be targeted ahead of the October high price at 114.691. A break above that level would take the price out of the "Red Box" and increase the bullish momentum.
A move back below the 200 and 100 hour moving averages at 113.655 and 113.548 would weaken the technical picture and have traders looking back toward the lower end of the "Red Box" at 113.21. Move back below that level, and the sellers have a second chance.
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