Euro And Pound Fail At Key Resistance: Milan Cutkovic

EUR/USD was rejected at the 21 DMA and extended losses to sub-1.1150 today. The short-term outlook is rather mixed, but there is a slight negative bias as the rally has clearly lost momentum. A break below 1.11 would signal that we will get at least a test of 1.1020 support.

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GBP/USD struggled in the resistance area between 1.28 and 1.2820, and tumbled towards 1.27. Another test of 1.2640 seems likely in the near-term. In case that level does not hold, further losses towards 1.25 seem quite likely.

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Meanwhile, things look good for USD/JPY. The currency pair broke above 111.40 resistance and could test 112 soon. The RSI shows we are still not in overbought territory, and there is potential for further gains. Intraday, look for solid support at 111.00 and 110.70/75.

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While techs point to further US dollar gains in the near-term,USD/CAD is struggling. And that despite weak oil prices, which usually puts the Canadian Dollar under pressure. It might seem tempting to buy USD/CAD here, given the signals in markets overall. However, USD/CAD still looks weak, and the downtrend remains intact. Waiting for a confirmation could be better in this case. A clear break above the 200 DMA around 1.3335 would confirm the bottom at 1.3165 and pave the way for a recovery towards 1.35.

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