US Dollar Still Vulnerable Within G3

Technical Analysis

A corrective advance by the US Dollar versus the Euro last week, but renewed losses against the Japanese Yen leaves the US currency still vulnerable to further losses within G3.

We still see a USDJPY bear trend and EURUSD positive tone into late February and likely on into early March.

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A further bear tone Friday, to again probe below modest 113.02 and 112.52 supports, to reinforce bigger negative pressures evident again since the mid-February stall ahead of 115.20 resistance (from 114.88), to again leave a bear bias Monday.

For Monday/ Tuesday:

  • We see a downside bias through 112.26; break here aims for 111.64, maybe to test the 110.97 cycle low.
  • But above 113.21/30 opens risk up to 113.93, which we would look to try to cap.

Moreover, 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 110.33/00.
  • Below here targets 106.65/12.

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

Daily USDJPY Chart



Despite the prod below support at 1.1084 Thursday, the TWO rebounds from the 1.1068/44 support area (from 1.1070 and 1.1064), again sets the bias higher Monday.

For Monday/ Tuesday:

  • We see an upside bias for 1.1157 and 1.1193/95; break here aims for 1.1259, maybe 1.1300.
  • But below 1.1070/44 opens risk down to 1.1000, which we would look to try to hold .

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


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