What to Watch Thursday and Friday DXY EURUSD GBPUSD EURGBP

With Janet Yellen as Biden’s pick for Treasury Secretary and Jerome Powell at the helm as Fed Governor, it’s a match made in heaven for US Dollar bears!  These pairs need to be watched.  In addition, a Brexit deal could be announced over the next few days.  GBP could fly in quiet markets if a deal is struck as the US in on holiday on Thursday and a half day on Friday!

DXY

Source: Tradingview, FOREX.com

Yesterday, the US Dollar Index finally closed below the upward sloping trendline dating back to 2011  and a symmetrical triangle.  It Is continuing lower today.  The thought of a dovish US Treasury Secretary and a dovish Fed is whacking the US Dollar.  Yesterday, the DXY closed below the trendline near 92.25 and is continuing lower today.  Support is at the September 1^st lows near 91.75.  Below is the 127.2% Fibonacci extension from the September 1^st lows to the September 25^th highs near 91.00.  Horizontal support from 2018 crosses at that same level.  Resistance back at the trendline near today’s highs at 92.25.

EUR/USD

Source: Tradingview, FOREX.com

EUR/USD is trying to push higher and close above the November 9^th highs near 1.1920, but so far is unable to hold it.   A close above that resistance would target the September 1^st highs at 1.2011 and then they 127.2% Fibonacci extension near 1.2122. However, current speculation of a no-deal Brexit has been keeping the pair in check. Trendline support at 1.1833 and then an 1.1750/1.1765.

GBP/USD

Source: Tradingview, FOREX.com

Combine a weak US dollar with continuation of Brexit talks (as opposed to not talking at all), and GBP/USD busts through trendline resistance and is higher for the 8^th out of the last 9 days! Resistance is the September 1^st highs of 1.3483.  Support is at todays lows, which is also previous resistance near 1.3304. 

EUR/GBP

Source: Tradingview, FOREX.com

If a Brexit deal does get done over the next 2 days, this is where the most action will be.  EUR/GBP sits at the 61.8% retracement level from the lows of April 30^th to the highs of September 11^th, near .8900.  In addition,  horizontal support from the lows of September 3^rd  lows sit just below near .8865, then the bottom trendline from the downward sloping channel near .8825.  However, if a Brexit deal gets done, price could be near the April 30^th lows of .8670 in the blink of an eye.  Note the February 18^th lows at .8281 as well. A confluence of trendline crosses above near .9000, however on a no-deal Brexit, the pair can be at .9300 in a heartbeat!

Watch for Brexit and US Dollar headlines over the next few days.  With the US out on holiday tomorrow and a light volume day on Friday, moves can be extended and erratic. 

For those of you celebrating the Thanksgiving Holiday tomorrow, be safe and have Happy Thanksgiving!