Let’s take stock of the dollar’s technical condition after yesterday’s dip and how it will set things up for today’s US employment data.
While the dollar may be relatively unchanged, with only the antipodeans showing significant movement among major currencies, there are some intriguing technical trends to keep an eye on. Let’s jump right in.
Hourly chart of the EUR/USD
The first is the dramatic reversal in EUR/USD, with buyers seizing back control of the currency pair in the short term.
The past three weeks of price activity has been marked by a general inability to close above the 100-hour moving average (red line). Price moved back above the 100 and 200-hour (blue line) moving averages yesterday, indicating that buyers have entirely reversed the bearish outlook to a positive one for the foreseeable future.
Next, it’s possible that sellers will put up a fight near bids at 1.0800 and the 100-day moving average at 1.0812.
USD/CAD daily chart
Concurrently yesterday, we witnessed USD/CAD fall as bullish momentum faltered. Despite last week’s hopeful break of trendline resistance, buyers were ultimately unable to push the market beyond the highs seen at the end of April.
As a result, the market’s fortunes changed, and now sellers are in command after a breakdown below critical trendline resistance and the intersection of the 100 (red) and 200 (blue) day moving averages.
If we do witness a negative US employment data later today, the pair may be headed for a challenge of crucial trendline support, now located around 1.3330.
AUD/USD hourly
The Australian Dollar to U.S. Dollar exchange rate is up next. The pair’s mood mirrors that of EUR/USD, with price action similarly unable to sustain a surge above the 100-hour moving average (red line) in recent weeks. A daily defense at 0.6500 this week is turning things around after sellers maintained their ground to keep the negative trend flowing.
Over 100 pips have been gained since the critical support level was broken, and the pair is once again in the grasp of buyers after breaking back over the 200-hour moving average (blue line).
If the dollar’s recent slide continues, a greater retracement to at least 0.6638 (50.0 Fib retracement of move lower in May) and 0.6680 (61.8 Fib retracement) is in order.
NZD/USD hourly chart
And then there’s NZD/USD, which also saw a week-long slide near critical support around 0.6000. The level maintained on the daily chart, and together with yesterday’s dollar reversal, it was enough for buyers to regain control in the near term.
Currently, buyers are maintaining control, albeit very little; but, if the dollar were to fall considerably more later today, we may witness a retracement to the 200-day moving average around 0.6148.
