US Dollar Pulls Back, but Watch These Key Levels versus Euro, Yen

07/22/2015 9:00 am EST

Focus: FOREX

David Rodriguez

Quantitative Strategist, DailyFX.com

With the Directional Real Volume indicator, David Rodriguez, of DailyFX.com, details how the US dollar pulled back sharply across the board, however, he also stresses that further dollar losses could be limited if the currency can hold key near-term support levels vs. the euro and Japanese yen.

• US dollar pulls back across the board, but watch key near-term support levels

• Next moves in the euro and Japanese yen could have an especially important effect

• See more information on DailyFX on the Real Volume and Transactions indicators


The US dollar has pulled back sharply across the board, but further dollar losses may be limited if it can hold key near-term support levels versus the euro and yen.

EUR/USD

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The euro has held key volume-based support at the $1.08 mark and a continued bounce leaves support-turned-resistance at $1.10 as the next near-term target. A break above $1.10 would shift focus towards substantial volume congestion starting near $1.1250.

GBP/USD

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The British pound continues to hold below key volume-based resistance at $1.5650 and near-term focus remains on comparable levels near $1.54. A break above $1.5650 would leave little in the way of until the year-to-date high above $1.59, but risks remain towards near-term weakness.

USD/JPY

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The US dollar continues to trade above notable congestion starting at the ¥123.50 mark against the yen and a hold above leaves near-term targets at major highs near ¥125.50 mark. Yet a break below ¥123.50 would shift focus to comparable congestion levels starting at ¥121.50.

AUD/USD

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The Australian dollar has traded back above former lows at the $0.7400 mark and a continued bounce would make the next short-term target key resistance starting at $0.7600. A failure here would instead make downside targets to congestion levels from 2008 near $0.7250.

GBP/JPY

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The Sterling has broken below recent lows at ¥193 versus the yen and the next major support level isn’t until notable volume and price congestion near ¥191.50.

NEXT PAGE: Three More Currency Pairs to Watch

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EUR/JPY

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The euro has traded above notable price and volume-based congestion levels near ¥135 and a continued bounce shifts focus towards significant volume-based resistance at ¥137.

USD/CHF

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The US dollar has traded above important volume-based resistance of SFr0.9500 versus the Swiss Franc, and but the USD/CHF has stopped and reversed at significant volume-based resistance at SFr0.9650. Former resistance now turns into support at 0.95.

USD/CAD

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The US dollar continues to trade near substantial highs versus the Canadian dollar and a recent build in volume and price-based congestion leaves C$1.2900-1.2950 as near-term support. Yet a break below would leave little in the way of a move towards considerable congestion starting at C$1.2750.

NZD/USD

Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)

Length of bar indicates the sum of Buy and Sell volume.

chart
Data source: FXCM Real Directional Volume Indicator, Chart source: R. Prepared by David Rodriguez
Click to Enlarge

The New Zealand dollar has found near-term support at a volume spike near $0.6500 and a continued hold shifts focus to support-turned-resistance at $0.6700.

By David Rodriguez, Quantitative Strategist, DailyFX.com

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