US Dollar Carving Out Bottom Against Most Major Currencies

[DailyFx]

The US Dollar looks to be forming a bottom against most major currencies. Although confirmation is yet to be seen, accumulating evidence is hinting at a reversal of recent rallies in the Euro, the British Pound as well as the Australian and New Zealand Dollars.









EUR/USD

Strategy: Pending Short

EURUSD is hinting at a double top below the December 2008 swing high. Negative divergence on the RSI oscillator bolsters likelihood of a bearish scenario. Near-term support is seen at a rising trend line established from the swing low in March (now at 1.4132). We will look for a daily close below this level to enter short.



For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.





GBP/USD

Strategy: Pending Short

The British Pound has turned lower having failed to overcome support-turned-resistance at the psychologically significant 1.70 level and is now testing support at a rising trend line established from the March swing low (now at 1.6410). As with EURUSD, negative RSI divergence adds weight to the bearish argument. A daily close below the trend line will trigger an entry short.



For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.





USD/JPY

Strategy: Flat

USDJPY has done fairly little in recent months, oscillating in a familiar range below support-turned-resistance in the 99.56 – 101.50 price congestion region. Longer term, the monthly chart reveals the pair continued to trend lower in a well-refined downward sloping channel established from the 2007 swing high. We do not see any attractive near-term entry opportunities at present.


For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.





USD/CAD

Strategy: Flat

Recent weeks have seen USDCAD working to build bullish momentum above 1.0782, a resistance-turned0support level that has continuously proven to be significant over the past year. A break lower will target the lower boundary of a falling channel in place since March (now at 0.9951) while a rebound higher will aim to challenge the channel top (1.1262). There are no clear entry signals at present and we will remain on the sidelines.



For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.





AUD/USD

Strategy: Pending Short

The Australian Dollar showing signs of a forming double top below resistance marked by the September 2008 swing high. Prices have formed a large Rising Wedge bearish reversal chart formation, with added confirmation seen in negative divergence on the RSI oscillator. We will look for a daily close below the wedge bottom (now at 0.8259) to enter short, initially targeting 0.7720.



For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.





NZD/USD

Strategy: Pending Short

New Zealand Dollar positioning is largely the same as that of its Australian counterpart: the pair is showing a dramatic rising wedge confirmed by clear negative divergence on the RSI oscillator, with a bearish reversal to confirm a double top below the September 2008 swing high. We will look for a daily close below the wedge bottom (currently at 0.67) to enter short.



For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.



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