Worse risk sentiment and month end flows have lifted the Dollar-Index (DXY) above the 105.00 treshold again. At this elevated level you have to be careful with Dollar shorts as the recent high of 105.79 is looming. Nonetheless, I will continue to seek opportunities to short the Dollar. But as always, it is important to look at the individual currency pairs.
(source: fxstreet.com)
EURUSD -- 1.0414
The Euro is 2 big figures down from Monday’s highs against the Dollar. I have pointed out this scenario or the danger here and here. At these low levels, I don't recommend going long Euro. A retest of the 1.0400 mark is quite likely now and the major support zone around 1,0360/40 is not far away. Above 1.0500 the picture may change again.
GBPUSD -- 1.2124
From a technical point of view I cannot recommend Sterlings longs either. Below the 1.2200 treshold and the support zone around 1.2161/1.2156 the currency pair is offered for now. Nonetheless, overall I think the Dollar is too expensive in Sterling terms. Tomorrow is Friday and a new month begins. I will watch the weekly close carefully.
AUDUSD -- 0.6878
The Aussie is suffering from the risk-off mood and the multi-year low at 0.6829 is in sight again. Another push lower in stocks could easily take the Aussie down with it. In this respect one has to be careful with longs, especially today at the end of the month. It is probably better to wait for the new week here either. But as you can read between the lines, I think the Aussie is also a long candidate. Let's wait and see.
Good luck,
Sebbo