Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Chief Macro Strategist
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Technical Update - EURUSD, GBPUSD, USDJPY, EURJPY & Dollar Index
Kim Cramer Larsson
Technical Analyst, Saxo Bank
EURUSD is testing lower rising trendline after heavy selling. A close below the trendline could push EURUSD towards the key support at around 1.0833
However, a dip to test the 0.786 retracement at 1.0928 could be seen.
Daily RSI without divergence is still showing positive sentiment and will remain so unless it closes below 40 threshold. A bounce could therefor be seen followed by uptrend resuming.
A close above 1.1150 will confirm uptrend has resumed.
A close below 1.0833 will change the picture on medium-term to bearish with downside potential to 1.07
GBPUSD rebound was cut short by heavy selling pushing it below the 0.618 retracement at 1.28.
GBPUSD could test the lower rising trendlines and they 0.786 retracement at 1.2708
If GBPUSD drops further to close below 1.2590 the medium-term uptrend has been reversed with down side potential to around 1.23-1.2175
There is no RSI divergence and the indicator is still in positive sentiment suggesting what we are witnessing is merely just a larger correction.
A move back above 1.30 will confirm uptrend has resumed.
USDJPY was once again hit by heavy selling pushing the pair down below 55 Moving Average to few cents from the support at around 137.85.
If taking out 14th July trough at 137.35 a move to 0.618 retracement at 135.54 is likely. If that scenario plays out it could demolish the medium-term uptrend with further downside to follow.
A move to strong support at around 133 could be seen.
RSI is showing negative sentiment supporting lower USDJPY and for that picture to change a close above 142 is needed.
EURJPY broke yesterday below lower rising trendline and by closing below 153.28 has confirmed a Double Top pattern.
RSI has switched to negative indicating downside potential to 148.63 as indicated by the two vertical arrows.
However, quite often the full Double Top downside potential is not reached. A drop to the 0.618 level at 150.40 could an exhaustive move before buyers take back control.
100 daily Moving Average is adding to the support around that level.
A close below 148.60 will demolish the medium-term bullish picture.
Dollar Index is testing the 0.618 retracement at 101.73 but could bounce to the 0.786 retracement at 102.41 without reversing the medium-term bearish trend.
RSI is still in negative sentiment and needs to close above 60 to change that.
The declining 55 and 100 daily Moving Averages will provide overhead resistance. Dollar Index seems likely to resume downtrend. TI will be confirmed by a close below 100.32. Down side potential to 98-97.
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