Technical Outlook: US Dollar Index, EURUSD and Euro Index

October 16, 2015 13:42

US Dollar Index (I.USDX)

Following its break of 95.30, the US Dollar Index (I.USDX) stretched the declines toward the lowest level in nearly six weeks; however, better that forecast Core CPI numbers from US, triggered the index pullback from 50% Fibonacci Retracement of its November 2014 – March 2015 advance. The greenback gauge seems now capable of extending its bounce to 95.00 and the mentioned 95.30 immediate resistance levels; however, 100-day and 200-day SMA confluence, 95.90 – 96.00, becomes a strong upside level that the index needs to tackle in order to rally towards 96.45-50 important horizontal resistance level. Should it becomes capable enough to surpass 96.50 on a closing basis, chances of its quick rally towards 97.70-80 becomes brighter. On the downside, 50% Fibo near 93.75, quickly followed by the 93.30 crucial horizontal support, are likely levels that could limit further downside of the gauge. If the index fails to hold 93.30, it becomes vulnerable to plunge towards 92.00 round figure mark.

EURUSD

Even if the two month old ascending trend-line depicts the EURUSD up-move to recently marked two month high, the long standing 1.1460-90 strong horizontal resistance region, restricted the pair's further advance during Thursday. Given the pair's recent pullback from important resistance, coupled with improved USD, the pair is more likely to re-test 1.1280 immediate support before resting near the 1.1230-25 area, encompassing 38.2% Fibonacci Retracement of its December 2014 to March 2015 and said trend-line support. In case the pair fails to hold 1.1225, it can immediately drift lower to 1.1100 round figure mark. Alternatively, a reversal from the currently 1.1350 area may reach out to 1.1400 psychological mark prior to facing 1.1460-90 area. If the pair manage to break 1.1490, also surpasses the 1.1500 mark, chances of its extended upward trajectory towards 1.1650 can't be denied.

Euro Index (I.EURX)

Failure to surpass the 100.00 psychological magnet on a daily basis pulled back the Euro gauge to the week's low on Friday, indicating further downside towards 98.50 and the 23.6% Fibo of its March 2014 – March 2015 decline, near 98.25, quickly followed by the 100-day SMA, near 98.00 round figure level. Even if the index is more likely to reverse from the said SMA, as it did during August and September, a break of which can make the index weaker enough to directly plunge to 97.00 and then to the seven month old ascending trend-channel support near 96.40. Meanwhile, a closing break of 100.00 mark could strengthen the index towards rallying to 100.50 and the 38.2% Fibo, near 100.95 while further up-moves can find it difficult to break channel resistance, near 101.60.

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