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U.S. DOLLAR INDEX

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U.S. dollar strength is here to stay. Greenback had a strong recovery last week. Strong dollar will continue to put pressure on commodities, commodity currencies and also emerging markets. In other words, weak emerging markets, commodities and strong U.S. Dollar trend is likely to continue in the following months.

After its breakout from a decade-long consolidation in the last quarter of 2014, U.S. Dollar index rallied from 85 to 100 levels. Since March 2015, price has been pulling back to the strong support at 92 levels. Last week, the dollar index tested the strong support and rebounded sharply. Latest consolidation is more like a counter trend move in the context of a short/medium-term correction. Uptrend in the U.S. Dollar remains intact and once the choppy sideways consolidation is over we can expect the continuation of the uptrend.

US DOLLAR INDEX

MAJOR U.S. DOLLAR CROSS RATES

EURUSD

USDSGD

U.S DOLLAR VS. SINGAPORE DOLLAR

USDSEK

U.S. DOLLAR VS. SWEDISH KRONA

USDNOK

U.S. DOLLAR VS. NORWEGIAN KRONE

USDCAD

U.S. DOLLAR VS. CANADIAN DOLLAR

USDJPY

U.S. DOLLAR VS. JAPANESE YEN

GBPUSD

BRITISH POUND VS. U.S. DOLLAR

NZDUSD

NEW ZEALAND DOLLAR VS. U.S. DOLLAR

AUDUSD

AUSTRALIAN DOLLAR VS. U.S. DOLLAR

AUD/NZD

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I analyzed this pair in April 2014. Cross rate showed significant chart pattern development at a historical support. AUD/NZD is trying to rebound from 3 decade-long support level. 1.05 was tested for five times over the past thirty years. Each test was recorded as medium/long-term low. We are there again… Not only the long-term chart is signaling a possible rebound but also the daily chart is suggesting higher AUD/NZD with a double bottom chart pattern.

  1. On the long-term monthly scale chart MACD is trying to reverse from a historical low-level. Buy signal on MACD will be bullish for Australian dollar.
  2. On the daily chart AUD/NZD breached the horizontal resistance at 1.095. Last challenge is the 200-day moving average at 1.103 levels.

I think the overall technical outlook is turning in favor of Australian dollar versus New Zealand  dollar.

Monthly scale chart

AUDNZD

Daily scale chart

AUDNZD II

AUD/NZD

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AUDNZD

Long-term charts usually reveal important information. Historical price levels are widely followed by investors and traders. Australian Dollar/New Zealand Dollar cross-rate is now at a historical support level. This long-term support was tested for the 5th time over the past three decades. 1.05 acted as support and each time the cross rate reversed from this level and moved higher.

AUDNZD II

Similar technical action can repeat itself as we are also seeing a bullish base formation in the short/medium-term. Double bottom chart pattern suggests higher prices if the neckline at 1.095 is broken on the upside. A decisive break above 1.095 will favor Australian dollar against the New Zealand dollar in the short/medium-term.