The spread of the Israeli-Palestinian conflict to Lebanon and Iran, combined with good US unemployment figures, has prompted Forex traders to reposition themselves in favor of the dollar. To the point of significantly downgrading certain technical configurations. A detailed review of the forces at play.
After once again hitting the upper limit of its consolidation channel at 1.1202, the EURUSD breached its lower limit at 1.0980 on the back of much better-than-expected employment figures. The break of this key technical threshold undermined the upward momentum and validated a classic double-top reversal pattern with theoretical potential at 1.0815. The proximity of intermediate support at 1.0958/37 could, however, provoke some bullish reactions at first. Note that the invalidation level for the bearish pattern is 1.0980. In parallel, we’ll be keeping an eye on the 1.3060/20 support level on the GBPUSD.
USDJPY has rallied to 147.16 and is currently testing the highs of the August rebound at 149.40. We can expect an intermediate break towards 145.07, before considering a continuation towards 151.48/152.10. It should also be noted that the USDCHF has breached the upper limit of its horizontal consolidation channel at 0.8540/70, allowing it to reach 0.8790.
Finally, in commodity currencies, the aussie is consolidating after overshooting the 0.6900 mark. It is currently testing a support zone at 0.6800/6795, a threshold which must be held in order to limit the current downturn and envisage a resumption of the advance towards 0.7110/60. Conversely, a clear break of support should send the currency back towards 0.6650. The Kiwi has formed a bearish encompassing pattern on a weekly basis, reversing the previous two-week uptrend. The figure’s potential is 0.5920, which could be invalidated at 0.6261.
