The dollar index (DXY) is bought this european am but nothing has changed in the overall picture. For four days, the index has been trading in the even smaller 101.00/101.80 range and besides me, the market is probably also waiting for a breakout. However, the decisive levels are still some way off at 100.80 and 102.20/40. And if not even the central banks provide volatility anymore, we probably have to wait for a special news situation.
On the dollar negative side, of course, the U.S. debt ceiling immediately comes to mind. There is every year a small risk that it will not remain a theatrical performance like most years before. In contrast, a different risk assessment could potentially support the dollar within the G10 currency areas.
EURUSD -- 1.0979
The currency pair has broken through the level of 1.1000 this morning, having already ended the trading session yesterday well below the 1.1033 pivot. With a clear daily close below the 1.1000/03 (mid Bollinger band) resistance zone there is a certain chance that the upside is done for now. Above 1.1033, the short scenario would be over again.
USDCHF -- 0.8924
It’s been a while since we discussed (#142) this currency pair. However, my opinion has not changed in the meantime. I would add to Dollar longs in the direction of the 0.8757 jan 2021 low. With respect to the possibility of an US default on its debt it could be better to avoid delta 1 risk and switch to FX options. Tenors with 1 month an above make sense: “Treasury Secretary Janet Yellen has warned that without more borrowing, the US will not have enough money to meet all of its financial obligations as soon as 1 June.” (bbc.com)
AUDUSD -- 0.6759
The Aussie has had a nice 3.50% rally from 0.6574 (28apr) to 0.6804 yesterday. Now trading above all previous resistances (mid Bollinger band 0.6693, the 50 ema 0.6714 and the 200 dma 0.6727) you have to be careful with entering short trades. Above the pivot line at 0.6829, I would definitely want to get rid of shorts.
Good luck,
Sebbo