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Forex pairs in this Article » EUR/USD (Barcelona) - USD presents an improved backdrop after the break of key resistance levels, notes Niall O'Connor, FX Strategist at JP Morgan.

Key Quotes

"The reversal from the October low for the DXY and the JPM USD Index follows a successful test and hold of a number of important support levels. The DXY reversed after approaching the 78.92/78.60 medium term range lows (Feb/Sept)."

"The subsequent rally has developed with an impulsive bias while raising the risk that a deeper recovery 80.75/81.20 zone for the DXY confirms at least a short term low in place."

"This is consistent with the violation of the important 1.3475/50 zone for EUR/USD. As this area includes the uptrendline from the July low, the former high from August and the September breakout zone, the downside risks have increased."

"Moreover, the extension above the key 83.80/84.15 zone for the JPM USD Index argues for additional upside. This area represents the September breakdown area, 200-day moving average and the October low."

"While the 84.36 trendline resistance from the July peak can allow for some pause, the upside risks are on the rise with breaks seeking a closer test of the 85.33 September peak."
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