(MENAFN - DailyFX) TheUS Dollarcontinues to look strong, but there is an important inflection point ahead for traders to pay attention to.EURUSDis running towards yet another test of levels that could break or continue to keep the choppy price action in place.GBPUSDsaw some life yesterday on headlines; it has an interesting technical backdrop of support and resistance.USDCADis maintaining its upward grind, watching to see if momentum can kick in or whether the sluggish rally is ready to roll over; there are signposts to watch for further clues.
Technical Highlights:US Dollar Index (DXY) rallying towards resistance EURUSD declining towards underside recent low, t-lines GBPUSD rallies off support, has trend resistance in sight USDCAD channeling higher, momentum or rollover?
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US Dollar Index (DXY) rallying towards resistance
The US Dollar Index (DXY) price action turned a little sluggish lately, but so far all it looks like only a pause in the rise off the monthly low before attempting a run at 98.93, top-side trend-line. Powell speech in Jackson Hole today could prove pivotal, or not. It's late August, summer trading conditions…
US Dollar Index (DXY) Daily Chart (resistance ahead)
U.S. Dollar Currency Index (DXY) by Tradingview
EURUSD declining towards underside recent low, t-lines
TheEurois nearing the monthly low and once again trading around a one-year underside trend-line. The grind looks like it is set to eventually lead EURUSD to a strong move lower, but we must respect the choppy trading environment until it changes gears. With that in mind, a sharp break through 11000 is viewed as the key to trigger selling, but another reversal prior may be in store if recent history is any indication.
EURUSD Daily Chart (recent low, underside t-lines)
EURUSD Chart by Tradingview
GBPUSD rallies off support, has trend resistance in sight
Cable got a nice lift from support formed via the 2016/17 bottom process. This has the top of a multi-month channel in focus, with the upper parallel effectively having been met as of yesterday. It makes for an interesting spot, with support just below but trend and resistance bearing down. Giving more respect to the long-term support level, a break above the upper parallel could extend the rally to 12400 and beyond, while a turn down from here could have support from 2016/17 probed even further.
GBPUSD Daily Chart (off support, but trend resistance just ahead)
GBPUSD Chart by Tradingview
USDCAD channeling higher, momentum or rollover?
USDCAD has been stuck grinding higher in recent weeks, which has kept traders a bit off balance. On one hand the weak momentum suggests it could break at any time, and on the other hand one has to respect that it is trending higher with higher highs and higher lows in place on the short-term charts.
Something has to give here soon, either a break higher above 13345 towards a 2016 trend-line near 13430 or a break below a month-long trend-line that has the 2012 trend-line near 13000 in play.
Watch the wedge on the 4-hr time-frame, following the break...
USDCAD Daily Chart (rally or roll?)
USDCAD Chart by Tradingview
USDCAD 4hr Chart (Ascending wedge)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX