The greenback is trading more mixed today, holding slightly lower on the balance of things as it is seen 0.3% lower against the euro, yen, pound and franc at the moment. But it is trading little changed against the commodity currencies, with risk sentiment looking fairly more tentative so far in European trading.
All eyes are on the US CPI data coming up later, so let's see what the potential technical impact could be depending on what the release might have to offer.
First up, we have EUR/USD which continues to trade in no man's land - something which I've been pointing out since last week. Key technical resistance is seen closer to 1.1000 with support seen closer to the January lows near 1.0500. As such, the fact that we are trading near 1.0750 - which is right smack in the middle of that range - isn't helping in terms of overall direction.
It would require a break on either side of the key levels noted above to really convince of the next momentum move in EUR/USD.
Then, we have USD/JPY which is seeing yesterday's gains pull back a little as the volatility swings continue to play out. The top yesterday was once again thwarted by short-term resistance around 132.87-90 but the key resistance point to watch will be the late December to January highs around 134.50-75 as well as the 135.00 mark. I'm pinning the latter as the major one to watch, if buyers are to try and make a play for any upside push in the pair.
For now, the sequence of lower highs, lower lows is somewhat intact but we are seeing more of a consolidation in the past two weeks. So, if buyers can pull something off, that will be encouraging but if they fail and we see a run back under 130.00 towards 128.00, that could carry the momentum back towards a potential drop to 125.00 next.
GBP/USD is one that I don't really fancy at the moment as both the pound and dollar side of the equations are rather iffy. The recovery in the pair since the whole mini-budget fiasco has been impressive, but key technical resistance lies at the December highs of 1.2443-46 at the moment. Buyers will have to break above that to extend the next upside leg.
Meanwhile, downside momentum for now is limited closer to 1.2000 with further support seen at the 100 (red line) and 200-day (blue line) moving averages at 1.1871 and 1.1941 respectively. The 30 November and January lows around 1.1840-00 is also a modest support region to be mindful of in case we do see the downside pressure extend. A break below that could really set off a drop towards 1.1500 potentially.
Looking over to the antipodeans, AUD/USD has seen its solid start to the year capped by the August highs of 0.7125-36 but the pullback early last week was arrested by the 19 January low at 0.6870 and that will be a short-term support region to watch. Essentially, the pair is trading in between those two levels now in search of the next momentum push.
Towards the upside, there is further resistance from the May and June highs around 0.7266-82 next while towards the downside, there is further support in the form of its 200-day moving average (blue line) at 0.6804 next.
Lastly, we have NZD/USD which has seen recent gains stall near 0.6500 and that continues to be a massive impediment for buyers to try and establish the next upside leg for the pair. Further resistance will then be seen at the May and June highs as well, around 0.6568-75 next.
Meanwhile, any significant push lower will have to get through the December and January lows around the 0.6200-30 region first before the 100 (red line) and 200-day (blue line) moving averages at 0.6141 and 0.6185 respectively will come into play for the pair. A break below the latter would be more convincing for sellers in search of a drop towards 0.6000 next.
