USD Trend Continues

The US dollar lost its closing recovery steam after the closing Friday and continued its weakness in the European session heading for the North American trading. The US dollar index have lost ground and currently working at the 73.65 basis point. A breakout of its trading range would occur soon enough, although when the exact breaking point would be difficult to anticipate. The vulnerable 72.90 would be easily taken out as the corresponding European majors likewise continues to rally on. 

Meanwhile, the EURUSD and the GBPUSD also headed higher currently at the 1.4471 and 1.6560 respectively; gaining momentum towards the start of the week's trading. The average swing trading range on a daily basis within the past weeks have maintained at least between 100-150 easily. Where a struggle between bulls and bears can be seen in the price behavior. A break higher for the GBPUSD and EURUSD would not be surprising the way price behavior is moving at current pace. So far the European pairs are taking the lead targeting the previous registered highs from the past month of June at the 1.4650-90 levels and 1.6720 levels respectively. Momentum and volume build up would trigger this targets. 

Technical bull spreads between the Euro and Pound can be seen more during the closing movements of the past weeks; as the struggle between the institutional and speculative players have been mixed. A European or an American shake out would occur before the actual break of the trading range. A confirmation and follow through from the prices higher for the daily Euro would justify its complex daily inverted head and shoulders formation and a weekly bull chart still intact for this move. However, the likely scenario and market conditions is more towards the GBPUSD.

This has been keeping the EURGBP cross at bay and maintain a stronger psychological support price at the 0.8660 firm. With a low risk tolerance levels at current prices of 0.8721; an anticipated move lower still would not be discounted as the candlestick formations are not as convincing as the GBPUSD in itself. Although. the overall picture for the EURGBP cross is still bearish from its previous highs of 0.8880 resistance price. Earlier shorts at the 0.8990 high would may well prove to be the major resistance chart and price wise.