Yesterday the Dollar Index (DXY) retested the downside - but there was quite a large reversal after hitting a low of 101.51 (close 102.39). In terms of the major crosses, however, it's still too early to say that the dollar is out of the woods. Rather, I suspect that there must be one more dip before the dollar can move into a more sustained phase of recovery. The fact that the US hits its debt limit could be a bigger issue this time. Nonetheless, one should be cautious about dollar shorts already at current levels.
EURUSD -- 1.0824
The currency pair closed the trading day just around the decisive 1.0800/0780 support zone. Without great conviction there is not much to do at the current spot level and it is better to wait and see. Above the 1.0870/80 resistance I would get rid of shorts for the time being. The next support level apart from the 1.0800 figure is given by yesterday's daily low at 1.0766.
USDJPY -- 128.37
Slowly but surely, the yen is approaching more neutral territory against the dollar after the big sell off in 2022. However, the consolidation phase does not seem to be over yet and a test of the 126/125 treshold in the near future looks quite likely. The Bank of Japan confirmed its quantitative easing program and the key interest rate at -0.10% in yesterday’s interest rate decision. In the medium and long term, this should tend to weaken the yen.
USDCHF -- 0.9162
A key support zone - the 0.9092 represents the lower end of the 2022 range - held yesterday. While this currency pair may test the downside again either, longs above 0.9000 look promising. There is no need to rush though, the 50 ema (0.9378) is falling every day and could soon provide another signal.
Good luck,
Sebbo