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The US Dollar Rejected as the Strong G3 Currency, Now Looking Weak!

Technical Analysis

In our last report we highlighted that “the USDJPY surge higher on Friday and EURUSD roll lower into month-end sets a more bullish tone for the US currency within G3“. Wrong!!

The significant sell off of the US currency on Wednesday, across G8 currencies and particularly versus the Japanese Yen and Euro, leaves a more bearish bias for USDJPY and bull tone for EURUSD now into early February.

More currency pairs technical analysis

EURUSD

A very unexpected surge through strong resistance at 1.0968/76/85/92/1.1011, but also then above 1.1060, 1.1096 and longer term retrace level at 1.1123 to see a bigger picture, February shift to a more bullish theme.

Moreover, this also sets the bias higher again for Thursday.

For Thursday/ Friday:

  • We see an upside bias for 1.1146; break here aims for 1.1200 and maybe 1.1286.
  • But below 1.1044 opens risk down to 1.1000, maybe 1.0951.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.1286.
  • Above here targets 1.1395 and 1.1495.

What Changes This? Below 1.0902 signals a neutral tone, only shifting negative below 1.0777.

Daily EURUSD Chart

EURUSD

USDJPY

An extremely aggressive sell off Wednesday (after a small top Tuesday), to plunge through multiple support from the BoJ rally and below, to leave risk lower again Thursday.

For Thursday/ Friday:

  • We see a downside bias for 117.00; break here aims for 116.70, 116.47 maybe the 115.96 low!!
  • But above 118.26 opens risk up to 119.02.

Furthermore, the push below 117.62 now signals a renewal of bear pressures into February.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 115.96.
  • Below here quickly targets 115.57 and 113.86/30.

What Changes This? Above 121.69 signals a neutral tone, only shifting positive above 123.57.

Daily USDJPY Chart

USDJPY

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