The week kicks-off with fear, where the recent risk-on trade was interrupted and high yielders lost their appeal as investors run towards the U.S. dollar.

The recent news we discussed in our previous update triggered haven demand, where theU.S. dollar indexsurged after opening the day at 78.36 to currently trade around 78.60. The 78.30 support managed to halt the recent sell-off; however this upside action is considered a mere rebound for correction.

Over the short term the downside bias remains in favor and targeting mainly the bottom of the main ascending channel for the index currently around 77.30 areas. A breach below 78.30 shall hint the continuation towards the aforementioned level. However, we prefer intraday resistance at 78.80 to reject the index bullish attempts, otherwise the rally could extend further.

TheEUR/USDtopped at 1.3485; just below the main target at 1.3500 to reverse sharply and trading now below 1.3400. The recent breach above 1.3320 high could support the pair during the upcoming period, where we expect further upside attempts from levels above 1.3300 towards 1.3500 areas once more, where we may see a period of range trading among key technical support at 1.3200 and key resistance at 1.3600. The ongoing downside correction should stop at levels above 1.3200 for the bullish bias to remain intact over the short term.

GBP/USDfell as well, trading around 1.5840 after opening the session at 1.5883. The trading range is relatively narrow for such volatile trading today, as the price printed a high at 1.5900 and a low 1.5833.

The recent high and the 200-days among 1.5900-1.5925 continue to form a strong ceiling and is the main resistance level to watch in the near term. On the downside; the 50-days SMA and the latest swing low and major support at 1.5645 is pivotal. Those areas are the main directional levels to watch; however over intraday basis the 1.5800 followed by 1.5730 could direct price action.

USD/JPYdipped to test the first seen support level at 80.30, the current correction is a normal reaction to the recent sharp rally, where RSI momentum indicator is providing extensive overbought signs, and currently attempting to leave overbought areas. We may see an extension of the correction towards the recently breached major highs among 80.00-79.50 areas, however we expect to see demand takeover again, targeting 81.00 and 82.00 areas once more.