CountingPips Forex Market Update
The US dollar has been on a bull run this week and has reached multi-months highs against some of the other major currencies. The American currency has since pulled back from the highs of the week but overall shows weekly gains. According to currency data near the end of the US trading session on Thursday, the US dollar for the week has increased versus the euro, Japanese yen, British pound sterling, Swiss franc, Canadian dollar, Australian dollar, and the New Zealand dollar.
Updated individual currency pair analysis:
Euro/US dollar: The euro/US dollar pair has bounced off of short-term support around the 1.2850 level for second day in a row, slowing the slide of the previous two days. Any further correction upwards from here would likely bring the 1.3000 back in play later today or Friday. We would likely need to see a close above 1.30 to get bulls excited. Getting trading action below the recent support at 1.2850 would open a test of 1.2750 previous level.
British pound sterling/US dollar: The British pound is fighting back against the early downtrend that happened this week. On the weekly charts, we are trading outside the 10-week rising channel which could signal the uptrend since early March has completed. Generally, a close below the 1.5250 level would be needed to forecast a bearish push further down towards 1.5100.
US dollar/Japanese yen: The dollar may have topped out for the week against the yen on Wednesday when the pair reached as high as 102.75. The pair then closed out lower on Wednesday and looks to be taking a small step back also on Thursday. It will be interesting to see if we do get a deeper pullback here and if so, to what level do we pullback to. Do we make it all the way back to a 100/yen support level?
US dollar/Swiss franc: The dollar’s rise this week catapulted all the way to a high of 0.9746 versus the Swiss franc. This is the highest levels we’ve seen since August. From that high, prices have retraced back over 100 pips over the latter part of Wednesday and into Thursday trading. Sustained short-term franc strength would bring us to the major round number level of 0.9500 as support.
US dollar/Canadian dollar: This currency pair on the weekly charts is trading in a wedge pattern since late 2011. The USD/CAD has been on a rising trendline since making a low at 0.9631 in September of 2012. There is a major support level about 150 pips below current prices at the 1.0000 level while a weekly resistance trendline sits above at 1.0316 and has held since late 2011.
Australian dollar/US dollar: The Australian dollar bearish moves have been dramatic and quick. The AUD/USD pair has fallen below parity which confirms the Aussie has fallen out of favor substantially. If the AUD/USD can build a base of support from the 0.9800 to 0.9850 level (previous support), we could see a possible run back at parity with the 1.00 level acting as logical and heavy resistance barrier. Further downside action may bring 0.9650 and then 0.9500 support.
New Zealand dollar/US dollar: The New Zealand dollar has also fell out of favor for Forex traders rather quickly as it has followed the Aussie down to lower levels. The pair is currently trading over the 0.8160 level with 0.8150/60 area acting as key support. A break below 0.8100 area would likely propel us lower to a test of the major 0.80 level. Upside momentum will run into a previous resistance level around the 0.8350 price with psychological level of 0.8500 pending above.
Written by Zac Storella, CountingPips Forex Blog & Currency Pair Technical Analysis
