The Dollar-Index (DXY) lost 1.92% within hours from an opening of 112.957 to a close of 110.788 last week friday. Thus, we were correct in our assumption that the Dollar is trading too high. The DXY is currently testing support at 110 for the third time in the last 35 days. It is very likely that the 110 level will not hold this time. With midterms today and US CPI numbers on Thursday, there are definitely potential catalysts.
EURUSD -- 1.0000
The currency pair is hovering around parity at time of writing. This level acts like a magnet, but despite this, the Euro has already left the bearish territory. Trading above the 50 ema and the red descending trend line I would not look for shorts anymore. Next minor resistance can be found around 1.0093/94.
GBPUSD -- 1.1481
This currency pair is almost impossible to trade. It went from a high of 1.1646 (27oct) to a low of 1.1148 (04nov) and back to a high of 1.1542 yesterday. Of course, such high volatility has its advantages, but only if you are on the right side. Above the 50 ema (1.1436), Sterling should be supported for now. Next resistances are 1.1537/42 and 1.1565/66 before 1.1645/46 comes into play.
USDCHF -- 0.9885
Former high at 1.0148 held on Friday. Since then, the currency pair has been in a steep decline. The 50 ema (0.9876) delivers support at time of writing but ultimately this level could also be at risk. Below the mid Bollinger band (0.9984) the Dollar should be capped for now.
AUDUSD -- 0.6480
The Aussie is still trading surprisingly weak given the rally in equities. This makes me wonder if stocks are too high or the Aussie is too low. From a technical perspective the currency pair needs a convincing green candle above the 50 ema (0.6512) and the October high (0.6548). Below the 0.6363 pivot point and the mid Bollinger band (0.6361) I would get rid of longs for the time being.
Good luck,
Sebbo