FOREX: USD - BBDXY Needs To Hold Break Above 1205 To Build For A Move Higher

The BBDXY has had a range today of 1209.81 - 1211.72 in the Asia-Pac session; it is currently trading around 1209, -0.15%. The USD is looking to consolidate and then build on its break back above 1205 from last week. The market is much more comfortable selling US dollars, but with a rate hike now being priced in and red flags appearing in the stock market the Bears are being forced to reduce exposure. On the day, the break above 1205 looks meaningful and could keep the USD supported on dips in the short-term. The first support is back toward the 1205-1207 and then the 1200 area, should this break higher be sustained then I would look for momentum to build for a test back toward the 1220-1230 area at some point.

• EUR/USD -  Asian range 1.1527-1.1548, Asia is currently trading 1.1545. The pair has broken the support seen just below the 1.1600 area as the USD breaks its trend lower. The market continues to be more comfortable selling US dollars, but this break lower will not be sitting comfortably with them for the moment. The USD will need to sustain and build this break higher for the move lower in the Euro to extend. On the day, the first resistance is back toward the 1.1570-1.1600 area, while the price holds below 1.1650-1.1700 I would be skewed toward another test of the 1.1400-1.1500 support area.
• GBP/USD - Asian range 1.3331-1.3361, Asia is currently dealing around 1.3360. The pair has rejected the 1.3500 area again and is looking to test the previous lows toward 1.3300. On the day, I would continue to be skewed toward fading rallies. The first resistance is toward 1.3390-1.3420 and then the 1.3500 area. Sterling Bears will be looking for this to top out again somewhere up here and have another test of the 1.3300 support. A sustained break below here implies a move back toward the 1.3000-1.3150 area.
• Data/Events: Germany April Industrial Production, US April Trade Balance

Fig 1: GBP/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P