The following are the intraday outlooks for USD Index (DXY), EUR/USD, AUD/USD, nad USD/CAD as provided by the technical strategy team at SEB Group.
USD INDEX: Back above the 55d ma band. Since the rebound from the 1985 trend line (twice challenged and twice rejected from) the market has continued to build a constructive wave pattern for a forthcoming break higher. Yesterday’s close back above the 55d ma band was another positive brick in the wall and we should now turn our focus to the recent wave (1) high, 97.78, the point where we expect to see the market take off in wave (3) targeting 101.07.
EUR/USD: Make or break? The pair has now fallen 78.6% of the May – June advance so continuing the contracting range since the May peak buyers should now be stepping up to the plate. Also the April trend line and not at least the 55d ma band are other supportive factors. A break below 1.0955 will however suggest that we’re making a real attempt to leave the past months doldrums and continuing south hunting fresh lows.
AUD/USD: Next attempt to break lower. Yesterday’s bearish key day reversal hints of a new attempt to end the past months consolidation/correction (the head and shoulders pattern should here be regarded as a downside continuation pattern) and to resume the underlying long term bear trend. A move (and preferably a close) below 0.7587 will argue that the next leg lower is underway.
USD/CAD: Price action remains bullish. We got what we came for – a 1.2563 test, but we want more… A short-term "Equality point" at 1.2600 may temper buying for a bit, but it is far from certain that it will. So instead of recommending taking profit on earlier suggested longs here, let the market do it for you by lifting the protective sell-stop to supposed support at yesterday’s midbody point at 1.2540. Beyond 1.2600, it would be right to lift sights to 1.2667\80.
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