US Dollar Technical Forecast: Neutral
- US Dollar DXY poised to retest 2022 excessive if costs break above wedge resistance
- GBP/USD might proceed its wedge breakout if costs can clear the 50-day SMA
- USD/JPY fell to its 50-day Simple Moving Average as Yen bulls return to market
DXY Technical Outlook: Neutral
The US Dollar DXY index struggled final week, falling greater than half a p.c, including to losses from the prior week and dropping to the bottom degree since July 5. A previous degree of resistance round 105.5 appeared to underpin costs. However, the downward development over the previous couple of weeks has fashioned a Falling Wedge sample.
That might put costs on a bullish path if DXY breaks above the wedge’s resistance degree. A run again up to the 2022 excessive at 109.29 can be on the playing cards if that happens. Alternatively, a drop again to the 50-day Simple Moving Average is feasible if costs break under the wedge. That SMA supported costs in May and June and will accomplish that once more if costs fall.
DXY 8-Hour Chart
Chart created with TradingView
GBP/USD Technical Outlook: Neutral
GBP/USD put in a powerful efficiency final week, rising over 1% to its highest degree since June. Prices rose above Falling Wedge resistance earlier this month, with costs extending larger since. The falling 50-day Simple Moving Average (SMA) capped positive factors on Friday after an intraday try to clear the shifting common failed.
A pullback to the June low at 1.1932 could also be on the playing cards if that shifting common holds as resistance. The MACD oscillator is nearing a cross above its centerline, which might represent a bullish growth, though the Relative Strength Index (RSI) is cooling and will flip again in the direction of its midpoint. The technical outlook for the week forward appears to be like impartial.
GBP/USD Daily Chart
Chart created with TradingView
USD/JPY Technical Outlook: Neutral
USD/JPY fell to its 50-day Simple Moving Average (SMA) final week, a degree not traded at since late May. The shifting common supported costs again in May and is showing to accomplish that once more as we head into a brand new week of buying and selling. A break decrease would signify a major technical growth for the reason that cross hasn’t traded under the SMA constantly, being a interval of multiple week, since early 2021.
That stated, USD/JPY’s course seemingly hinges on this SMA. A break low may even see the Japanese Yen prolong energy, pushing costs down to 131.34, the place resistance turned to help earlier this 12 months. The MACD oscillator, in the meantime, is on observe to cross under its midpoint, which might represent a bearish growth.
USD/JPY Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the feedback part under or @FxWestwater on Twitter