Last week saw the continuation of Eur/Usd liquidation with lows reaching near 1.1250 and closing at 1.1280. It has been our view since September that the Eur/Usd had greater risk to the downside and that has come to fruition. However, the more recent noise and new short positions which have been initiated below 1.13 give us reason to pause. While all technical pictures still point down and 1.0990 is still our longer term target, expect to see a battle all the way down and for the newer, weaker short positions to get stopped out first before resuming the downslide.
Eur/Usd shows weekly dynamic support at 1.1190/80 and dynamic resistance at 1.1375/85.
Sterling price action last week was reflected in the Eur/Gbp selling that dominated. Gbp/Usd was better bid throughout and closed inside of the previous week. Our contention here is that Sterling will continue to grind it’s way to 1.3100 from its most recent close of 1.3440 on Friday. Initial weekly dynamic resistance appears at 1.3515/25 and dynamic support at 1.3355/45.
Dollar Swiss, Usd/Chf was resilient last week and held up in the face of strong Eur/Chf selling pressure. Even so, the weekly Usd/Chf close at .9270 confirmed a higher low and points to a target of .9570. For the upcoming week, we see initial dynamic resistance at .9310/20 and dynamic support at .9230/20.
Dollar Yen, Usd/Jpy continued creeping it’s way upwards with a high of 114.90, towards our target of 115.20. There is no change in sentiment with this pair. The true next test will require a monthly close above 114.55 and we sit tight and wait to see how this will play out through the end of November. Look for initial weekly dynamic resistance at 115.05/15 and dynamic support at 113.10/00.
Dollar Canada, Usd/Cad pulled back just shy of last week’s dynamic support at 1.2485 with a low of 1.2493. This pair also completed the daily target of 1.2640 with a high of 1.2660. While the weekly chart still calls for higher price action to break the existing lower high at 1.2950, the first test of this being a possibility will require a daily close above 1.2745. We will wait to see before providing insight into the next major move in this pair. Initial weekly dynamic resistance comes in at 1.2715/25 and dynamic support at 1.2555/45.
The Aussie dollar, Aud/Usd, has made quite the about face. While just four weeks ago, closing above the prior lower high to break the weekly trend up, now closing below the 75% retracement of .7260, signaling a lower probability to recover higher. All eyes will be on the prior low of .7165 and a close below this level will open up to stop loss selling. We see initial weekly dynamic support at .7135/25 and dynamic resistance at .7315/25.
The Kiwi, Nzd/Usd, has seen similar selling pressure as it’s commonwealth cousin, the Aussie, closing the week at .6990. The difference with this pair is that prior to this week, it attempted four consecutive weeks to close above .7170 and failed. If this is an indication of what’s to come and the weekly chart now confirms this, we could continue to see price action drift lower to .6750. In order for this pair to pick up greater steam downwards would require a daily close below .6945. We wait patiently to see if we will break further or remain caught in the range we’ve seen for the last nine months. Look for initial weekly dynamic resistance at .7045/55 and dynamic support at .6930/20.