Since the low of 101.40 on May 8, the dollar index has risen 3.24% to a high of 104.31 yesterday. This is a bit surprising in view of the approaching June 1. Obviously, the date risk tends to lead to dollar buying, although the solvency of the US is at stake. The U.S. has a few days left to extend the debt limit. With a few brief exceptions, politicians have always been able to reach agreement. But of course, they can't be counted on to do so this time either, which doesn't make positioning any easier.
However, we do not want to complain. After all, we had expected the dollar to recover above the 100.80/100.00 support zone. But now it might be time to take profit for the time being. In any case, I recommend to reduce the risk here. Players with FX options have it quite easy. They can close their delta and hope for more volatility to come. Unfortunately, implied volatilities have been stable recently. But that can change quickly.
Nonetheless, the dollar rally could continue for a while longer. With regard to the individual currency pairs, interesting level were also reached:
EURUSD 1.0733 -- offered below 1.0787/0800 resistance zone. Next support at the lower Bollinger band (1.0672)
GBPUSD 1.2358 -- Bears hope for a clear weekly close below 1.2350 in the best case scenario. Next resistance at 1.2403 (50 ema)
USDJPY 139.72 -- The psychologically important 140 mark has held for now. However, the next technically interesting level comes in at 142.25
USDCHF 0.9031 -- The dollar has not yet made it above 0.9060. After that, it could go much higher. Below the mark of 0.9000 shorts are already at risk
AUDUSD 0.6528 -- Aussie trades in bearish territory and needs a quick lift above the 0.6564 resistance (former support) to change the picture. The next supports come with each big figure down to the 2022 low at 0.6170
Have a nice weekend!
Sebbo