The dollar index (DXY) is still trading within the 104/105 range (yesterday’s lod/hod 104.09 - 105.09) but a breakout should soon be on the agenda. Although I have a favoured direction, it is probably better to hold back on predictions at this stage. In any case, one should accept movements above the 105 resistance and below the 104 support and not trade in the opposite direction afterwards.
EURUSD -- 1.0627
Yesterday’s higher than expected german HICP figures (9.3% vs. 9.0%) have not helped much. The currency pair rejected the 50 ema and mid Bollinger band resistance. At the time of this writing, the euro area HICP figures have been published (Core YoY 5.6% vs. 5.3% cons / YoY 8.5% vs. 8.2% cons), which also show that inflation is likely to keep the market busy for even longer than some protagonists had predicted (or hoped?).
But the euro is not reacting positively to these high figures either. The market thus confirms my assumption that not much can be expected from Ms Lagarde. Hardly anyone believes that she will raise interest rates to a relevant level in the near future. And in view of the continued market intervention by buying (peripheral) bonds in almost unreduced amounts, I also lack the imagination for higher euro exchange rates in the medium and long term.
Short-term resistance can be found again by the 50 ema (1.0662) and the mid Bollinger band (1.0673). The 1.0565 (yesterday’s low) followed by the last two lows at 1.0536 and 1.0533 respectively are the next supports.
GBPUSD -- 1.1976
I was looking for spot rates around 1.2200 to buy dollars but these levels were unfortunately no longer reached since then. The 200-day line (1.1921) is at risk now and a test of this important support should come soon. Below the low of the year at 1.1841 (January 6), one should get rid of long sterling positions at the latest.
USDCHF -- 0.9418
We had already established that the short scenario is over for the time being with the break of the 50 ema. After the 0.9500 big figure, the 200-day line is now within reach. Until then, I will stay out of this currency pair. In the short term, the upper Bollinger band (0.9435) certainly offers some resistance.
Good luck,
Sebbo