Pessimism continues to dominate the trade, higher yielders extended their earlier losses against the green back today, as concerns over the euro's recovery's continues in a push back and forth game, and pop up every now and then; where downbeat employment and manufacturing figures pulled the trigger once again today.
As investors seek shelter the Japanese yen and the greenback found solid demand rallying against their major counterparts. The U.S dollar index fully filled the weekend bearish gap to trade back above the key short term technical resistance at 79.00, if we witness stability above this level the upside move could extend higher today, eying the 50-days SMA and the neckline for a possible bearish head and shoulder pattern around 79.30. In general, the index is currently trading in no man's land, where only steady trading back above 79.30 may negate bearishness in the near term and resume the overall bullish trend, on the other hand, the ascending trend is the key and 78.80 are the key to the downside.
The EUR/USD is testing the key support at 1.3270, currently attempting to breach the short term rising wedge pattern. A push lower below 1.3270 with few hours of trading shall open the door towards a retest of the 50-days SMA around 1.3180 followed by 1.3000 areas. You should take into consideration that the current range-trading stance remains valid so long as the aforementioned area holds. To the upside; taking 1.3380 will clear the way to February's highs at 1.3485.
The greenback looks fragile against the Japanese yen safe haven, the pair failed to settle above the key resistance we mentioned numerously before around 83.20, where price retreated again attempting towards the support of the recent range-bound at 81.90. Traders could benefit from a potential breakout play on this pair, as a dip below 81.90 may extend the move to 81.20 and 80.60 while to the upside above 83.20 the recent highs at 84.20 looks in hand.
The GBP/USD continues to hover around the key psychological level at 1.6000; we mentioned the importance of a sustained stability above the level for the bullish move to gather momentum. Anyhow; a bearish wedge pattern continues to evolve and that doesn't feel good in terms of the sustainability of the move, thus we need to see further days of trading above the level in addition to a breach above the ascending resistance of the wedge to look for further upside potential eying initially 1.6150 area. A dip below 1.5960 followed by the ascending support of the wedge could hint resuming the downside pressure once more.