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Don't write the dollar off just yet

EURUSD News by Simon Kazinsky on 06:03 February 06, 2019 EST

The buck still remains in a solid uptrend and it is likely to appreciate against the euro and the pound.

The dollar has traded sideways for the past few months against the world's main currencies. The Euro has remained in a tight margin in the 1.14 region while 1 dollar has bought around 109 yens and 1.30 British pounds. Retail traders are shorting the dollar against these currencies by a margin of 60 shorts for every 40 betting on its favour.

Meanhile, only Gold and the Canadian dollar have been able to make gains against the greenbuck.

All 4h charts and longer timeframes for EURUSD, USDJPY and GBPUSD set the dollar in a clear uptrend and as a result the dollar index shows the same trajectory.

I am therefore looking for EURUSD to keep travelling south and get to 1.07 in the coming weeks closing a gap left on its recovery from 1.04. Breaking above 1.15 would end this view.

GBPUSD just broke below its supporting moving average on the 4h chart and my view is still very bearish on this cross. The direction in the long term chart is clear. Ultimately, we may see the British pound getting testing the all time low at $1.10 established decades ago. Above $1.32 would put this bias on standby.

USDJPY should, however, turn lower if volatility picks up in the short/medium term if the yen acts as the ultimate safehaven once again.