The forex markets is rather steady today so far. As seen in the D heatmap, most pairs are staying inside Friday’s range. AUD is trading as the strongest one while JPY is the weakest. This is a reflection of risk appetite in the Asian markets, with Nikkei and HSI trading up as the week starts. USD is mixed for now, up against EUR, JPY and CHF, but down against GBP, CAD, AUD and NZD.
Movements in USD has been somewhat noncommittal recently, EUR/USD broke 1.2238 support last week but quickly recovered after hitting 1.2214. USD/CHF breached 0.9626 key fibonacci resistance but couldn’t found any follow through buying. Momentum in USD/JPY was also weak even though it extended recent rebound to 107.48. AUD/USD is staying in range above 0.7642 support. The clearer movements were seen in GBP/USD’s rebound after hitting 1.3982 support, but that mainly due to GBP’s strength. USD/CAD’s break of 1.2814 also suggests bearish reversal.
Nonetheless, we might be seen some decisive moves in USD soon. The index is now approaching medium term trend line resistance, and a breakout is likely imminent. For now, there is no sign of a trend reversal yet. And the fall from 103.82 (2017 high) is more likely to extend than not. Break of 88.25 will pave the way to 61.8% retracement of 72.69 to 130.82 at 84.58. We maintain the view that fall from 103.82 is a corrective move. And strong support is expected from 84.58/75 to contain downside and bring sustainable rebound finally.
