DXY, EUR/USD and GBP/USD price forecasts 8 June 2023
The dollar index, EUR/USD and GBP/USD prices have moved into near term consolidations, although longer term trends persist.
The dollar index / basket (DXY)
After breaking above the 103.15 the dollar index price has moved into a near term consolidation between levels 103.15 (support) and 104.35 (resistance).
The price continues to trade below the 200-day simple moving average (blue line) (200MA), suggesting that the longer-term trend bias remains down for the time being.
A close below 103.15 would suggest a downside breakout and continuation of the longer-term downtrend, with 102.00 the initial support target from the move. In this situation, a close above the one or two day high (depending on threshold for risk) might be used as a stop loss indication.
Should the price instead move to close higher and above the 200MA, the longer-term downtrend would be broken. This could suggest that we are now moving into a broader sideways rangebound environment, and a short only bias would no longer be considered.
Only on a move above the major high at 105.30 would a new longer-term uptrend for the dollar index be considered.
EUR/USD
The short-term correction of the longer-term EUR/USD uptrend has found support at the 1.0685 level. Traders looking for long entry and respecting the longer-term uptrend bias, might hope to see a strong close on today’s candle (8 June 2023) before targeting a move towards the 1.0855 resistance level. In this scenario, a close below the 1.0685 support level might be used as a stop loss indication.
Should the price break support and move below the 200MA, the longer-term uptrend would be deemed to have been broken.
Only on a move below the major low at 1.0513, might a new longer-term downtrend for the EUR/USD be considered.
GBP/USD (Cable)
The price of cable looks to be consolidating between levels 1.2342 (support) and 1.2543 (resistance). The longer-term trend remains up as we see the price still trading firmly above the 200MA.
Trend followers might hope to see either a bullish price reversal off the 1.2343 support level or break of the 1.2543 resistance level for long entry in line with the longer-term trend bias.
Should the price instead move to break support at 1.2343, a confluence of the 200MA and 1.2160 levels provide the next downside target from the move. In this scenario, trend followers might prefer to wait the initial weakness out, looking for a bullish price reversal closer to the 1.2160 for long entry.
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