That was a classic end of year intraday dip last week Thursday (lod 100.62) when the dollar index (=DXY) reached the important support level of 100.80 again. Since then, the dollar has experienced a small recovery, which came to an end yesterday at 102.73 for the time being. Above the major 100.80 support zone, you may look for dollar longs for a retest of the 104.20/40 resistance zone. However, if the 100.80 mark does not hold on a daily closing price basis, I would get rid of dollar longs for the time being.
We are still in the first trading week of the year. In this respect, this newsletter is purely a look at the technical picture. With the US CPI figures in a week's time, we will also return to macro topics.
EURUSD -- 1.0967
The currency pair is trading in bullish territory above the mid Bollinger band (1.0930) and the two moving average lines (200 dma and 50 ema). With a little imagination, however, last week's high could also be the right shoulder of a head and shoulders pattern. I will not look for euro longs here.
GBPUSD -- 1.2724
Sterling is trading at the upper end of the big 1.2000/1.2850 range above the mid Bollinger band and the two average lines. Although this is generally bullish territory, it could make sense to take a short position with a stop above the 1.2850 level. The risk reward is promising.*
USDCHF -- 0.8494
This currency pair could become a long candidate as soon as the dollar breaks above the 2022 year low (0.8553). After all, long CHF is one of the most crowded trades of all and offers potential for a countermovement. But for now, we'll have to wait and see.
Good luck,
Sebbo
(*reminder: my content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances.)