Fluctuations in the value of the dollar directly impact the returns that U.S. investors see on their...
Latest Outlook for 4 USD-Based Pairs
12/01/2011 6:00 am EST
Joel Kruger, technical currency strategist for DailyFx.com, discusses his outlook for major currency pairs including EUR/USD, USD/JPY, USD/CAD, and AUD/USD.
The market remains under some intense pressure and is now fixated on a retest of the key October lows at 1.3145. Look for the latest rallies to be well capped below 1.3500 on a daily closing basis, while ultimately, only back above 1.3870 would negate the outlook.
Once 1.3145 is taken out, it will negate the corrective October price action and should result in a more aggressive bout of selling into the 1.2000’s. We continue to project weakness over the coming weeks into the lower 1.2000’s as per the monthly chart.
See related: It’s High Time to Short EUR/USD
The market has managed to successfully hold above the bottom of the daily Ichimoku Cloud to further strengthen our constructive outlook.
We look for the formation of an inter-day higher low by 76.55 ahead of the next major upside extension back towards and eventually through the recent multi-day highs by 79.55. Ultimately, only a close back below the bottom of the Ichimoku cloud would negate the outlook and give reason for pause.
NEXT: See Latest Chart Patterns for USD/CAD, AUD/USD|pagebreak|
Our constructive outlook remains intact with the market focused on a retest of the key October highs by 1.0660.
From here, look for any inter-day pullbacks to be very well supported above 1.0200 on a daily close basis, in favor of an eventual break and fresh upside extension beyond 1.0660.
See related: Trade Retests of Key Levels Like a Pro
The latest break and close back below parity further solidifies our core bearish outlook. Now the door is open for an acceleration of declines.
From here, wee see risks for a complete and full retracement back to the October lows at 0.9385 and any intraday rallies should now be very well capped below 1.0100 on a daily close basis.
The next short-term level to watch below comes in at 0.9620 and we will see if the market can establish below over the coming sessions.
By Joel Kruger, technical currency strategist, DailyFX.com
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