Technical Update - EURUSD saying goodbye to parity, eyeing 0.90. Could the Dollar Index reach 120?

Technical Update - EURUSD saying goodbye to parity, eyeing 0.90. Could the Dollar Index reach 120?

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

EURUSD saying goodbye to parity. It might take long before it sees that level again. 0.90 is in sight.
Dollar Index moving higher – reaching 120 is not out of the question

EURUSD was rejected at parity, and it could be a long time before it sees it again. EURUSD has resumed downtrend currently testing 0.786 Fibonacci retracement of early October correction (where EURUSD tested parity) and is likely to drop below previous lows at around 0.9535. A likely short-term target is the falling trendline test and the 1.382 projection at 0.9358. RSI is showing negative sentiment and is at the time of writing back below 40 indicating further downside.
To reverse this scenario a close above parity is needed. 
Medium-term (as mentioned in the Q4 Outlook) there is not strong support before around 0.90.

 

Source for all chart and data in this article: Saxo Group

The Dollar Index is testing 0.786 retracement of the correction which bounced off the short-term rising trendline. RSI back above 60 and no divergence indicates higher levels going into October and November.

Medium-term the Dollar Index is about to surpass the 1.618 projection – again – at 113.10 eyeing the 1.764 projection at 115.26.
RSI value currently at 81.10 is getting close to its all-time peak from March 2015 at 82.78. However, there is no divergence indicating higher levels on the Index going into the end of 2022 and into 2023, even it is hit by a larger correction.
If the current steep uptrend is to become as long as the low to high of the sideways market from 2015 to 2022 the Dollar Index could reach 118.75-120. Illustrated by the two vertical arrows.

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