The US Dollar Index is now testing pivotal resistance between 81.39 and 81.48 (Upward sloping trend line of possible inverted head and shoulders and highs from Jan 2014 and Nov 2013), notes CitiFX Technicals.
"We have also seen the 55 day moving average now cross up above a rising 200 day moving average. A break through this range would complete what looks like an inverted head and shoulders which would target a move towards 83.40. In addition this also looks to be a double bottom formation that would target as high as 84.00," Citi argues.
"A close this month over 81.02 will complete the bullish outside month," Citi adds.
In EUR/USD, Citi notes that it posted a bearish outside day at the high followed by a bearish outside week and a double top and broke below rising trend line support and the 55 week moving average
"It is now testing and has traded below the 200 week moving average (1.3426). In the last move lower of note in EURUSD (October-November 2013 from 1.3833-1.3295) EURUSD also traded below the 200 week moving average but did not close on the week below it," Citi adds.
"Our preferred outcome would be to see that close this week. Thereafter support levels of note are: – 1.3295: Nov. 2013 low – 1.3105: Sept. 2013 low – 1.2745-55: April-Jul 2013 lows and our minimum target for this year," Citi projects. 