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DXY- US Dollar Index & EURJPY Outlook

DXY USD Index

DXY US Dollar index resistance at 95.00. This market is still in the process of creating higher lows when it dips into its support zone shown here on the chart. The highs from these dips are topping out around 9500.00 with the last one creating a high on the daily chart of 9528.62. The candle in response to the FOMC minutes from last week can be clearly seen bisecting the 9452.52 level with the following candle forming a Doji at 9497.11 resistance. The outcome of this pattern will be seen this week with the momentum still with long positions trying for higher levels.

Support for the pair is coming in at 9370.00 and a loss of this level hands control to shorts who will attempt to drive price lower out of the pattern of consolidating higher lows. This will need to break support at 9333.45 initially with the 9281.55 level providing more robust buying. This could lead to a bounce higher at this level but the strength of any such bounce will need to be strong enough to break back above 9400.00. A drop under 9200.00 will put significant pressure on the longer term trend higher.

EURJPY

The EURJPY pair dropped lower last week after finding resistance around 131.200 leading to selling pressure and a break under 129.000. Price is now holding above support at 128.423 and is below the supporting blue trend line at 129.500. A loss of support now can test 128.000with a drop under this level finding support around 127.000. This area can see buyers step in but a consolidation pattern here can see the support at 126.665 tested. The low volume area below extends down to 124.652 where the chart bottomed in May.

Resistance on the daily chart can be seen at 130.351 followed by the July high at 132.000. This level has shown itself to be of some strength impacting price action for much of the year initially as support and then as resistance. A break above this level could be a signal of the price action forming a bottom and attempting to break higher. This would require a confirmed break out and a move above the next level of resistance at 133.493.

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