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US Dollar Remains the G3 Weakling

Technical Analysis

An extension of the significant USD sell off into mid-February against the other G3 currencies (G3 being USD, EUR and JPY). In the short to intermediate term we see the US Dollar as the weakest currency versus the Japanese Yen and Euro, which leaves a negative tone for USDJPY and bullish bias for EURUSD through mid-Q1 and likely for February.

See the latest technical analysis

USDJPY

Further losses Wednesday through our 114.10 support to hit the next key monthly level from November 2014 at 113.86, to reinforce the Monday bearish outside pattern (that pushed below the January low at 115.96 and the key 2014 target at 115.57) to leave the bias lower again Thursday.

For Thursday/ Friday:

  • We see a downside bias to 113.73, then 113.30 a very strong retrace support target, maybe 113.00 and 112.85.
  • But above 114.30/35 aims for 115.26 opens risk up to 115.86.

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

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 113.30.
  • Below here targets 110.34/00.

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

Weekly USDJPY Chart

USDJPY

EURUSD

A strong dip and a bounce Wednesday to maintain upside pressures from the Tuesday push up through resistance at 1.1240, 1.1286 and the option/ psychological level at 1.1300, to reinforce the previous rebound from ahead of 1.1068/54 support to see risks higher again Thursday.

For Thursday/ Friday:

  • We see an upside bias for 1.1338 and 1.1355; break here aims for key 1.1395, maybe 1.1455.
  • But below 1.1200 aims for 1.1159/54 and opens risk down to 1.1084.

Short/ Intermediate-term Outlook – Upside Risks:  The early February surge up through critical resistances, particularly 1.1060 and 1.1096, sets a bull tone for the month.

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

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

Daily EURUSD Chart

EURUSD

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