EUR/USD (1.13) was limited in its price action yesterday, closing in a near doji looking pattern. Price action remains stuck near 1.130 a level that has held up since last Friday’s retail sales boost to the US dollar. A break below 1.30 could accelerate declines in EUR/USD for a move to 1.1220, where the next minor support exists. This dip could potentially signal the end of the medium term uptrend as any rallies will be capped near this new resistance of 1.130 – 1.1373. Below 1.1220, the next main cluster of supports is seen at 1.107 through 1.10285.

An alternate view is the bullish flag which still has potential to see an upside move in EUR/USD, but for this to be validated, a higher close above 1.154 is needed, in which case EUR/USD could test 1.1638.

(EUR/USD) 1.130 Support is holding up for now

USD/JPY (109) is well protected against further declines as the dollar trades above 108.17 – 107.69 support. Any declines should see the support level holding up in the near term, all the way to 107. However, a close below 107 could signal further downside with 105 emerging as the next support level. USD/JPY is in the process of forming what could be a bullish divergence at the current levels of 107 through 105. This could eventually see USD/JPY move towards 111.0 and possible through to 112.5 – 112.0 levels of resistance.

(USD/JPY) – Supported above 107

GBP/USD (1.44), having broken the median line is retracing its losses back to the support/resistance level of 1.451 – 1.447. This price point sits within the larger weekly median line and could, therefore, be a strong level to break (unless economic data from the UK turns bullish enough to sustain the moves). To the downside GBP/USD is likely to fall to 1.42 – 1.410 levels and for the most part, sterling could remain range bound.

(GBP/USD) – Price near resistance of 1.45

USD/CAD (1.28) is struggling to break free of the 1.2985 – 1.2923 resistance. This could see another dip lower to 1.26. The Stochastics shows a hidden divergence at the recent lower highs and this could confirm the downside view, especially with Oil prices pushing higher. USD/CAD is likely to see a ranging pattern within 1.286 – 1.260 – 1.2525 levels.