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The US Dollar Resurfacing as the Strong G3 Currency

Technical Analysis

A hesitant consolidation theme for the US$ in the second half of January versus both the Euro and the Japanese Yen, but the USDJPY surge higher on Friday and EURUSD roll lower into month-end sets a more bullish tone for the US currency within G3.

This leaves bias for further USDJPY upside and for EURUSD losses for early February.

More technical analysis

EURUSD

A plunge lower Friday through 1.0862/50 support to probe 1.0824 after the expected setback from 1.0968 (ahead of strong barriers 1.0976/85/92/1.1011) to set a still negative tone again Monday.

For Monday:

  • We see a downside bias for 1.0777/71; break here aims for 1.0708.
  • But above 1.0870 opens risk up to 1.0916, maybe 1.0968.

The early December (ECB) surge from our 1.0520 support signalled a shift to a broader range theme into February.

Short/ Intermediate-term Range Parameters: We see the range defined by 1.1096 and 1.0708.

Range Breakout Challenge

  • Upside: Above 1.1096 aims higher for 1.1395 and 1.1495.
  • Downside: Below 1.0708 aims for 1.0520 sees risk lower for 1.0459 and 1.0206.

4 Hour EURUSD Chart

EURUSD

USDJPY

An aggressive surge after the unexpected BoJ monetary policy shift on Friday to overcome 121.65 resistance, neutralising bigger picture bearish pressures, for a broader range theme into February and stetting a bull tone for Monday.

For Monday:

  • We see an upside bias for 121.69/75; break here aims for 122.19/33.
  • But below 120.60 opens risk down to 120.25, maybe 120.00 and even 119.59.

Short/ Intermediate-term Range Parameters: We see the range defined by 123.57 and 117.62.

Range Breakout Challenge

  • Upside: Above 123.57 aims higher for 123.75, 124.16, 125.28 and 128.85.
  • Downside: Below 117.62 sees risk lower for 115.96, 115.57 and 113.86/30.

Daily USDJPY Chart

USDJPY

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