Dollar in a rough spot towards the end of the week

<p>And that run continued in trading yesterday, with traders establishing the next leg lower for the currency. Things are a little slower today but the technicals aren't looking good whatsoever for the greenback.</p><ul><li>EUR/USD now trades above 1.1200 and its 200-week moving average of 1.1181</li><li>GBP/USD solidifies a break above the 1.3000 mark, now also above 1.3100</li><li>USD/CHF sees little support in a break below 0.8800 to its lowest levels since Jan 2015</li><li>NZD/USD tests waters above previous key resistance region of 0.6380-90</li></ul><p>Those are charts with little technical stops to halt the dollar demise. However, at least there are some with potential to see the dollar try and stop the rot.</p><ul><li>USD/JPY on approach to test its 100 and 200-day moving averages at 136.99-06</li><li>USD/CAD may have fallen to its lowest since September last year, but 100 and 200-week moving averages at 1.3064-67 sits nearby</li><li>AUD/USD nears the June high close to 0.6900 with 100-week moving average at 0.6956</li></ul><p>On the balance of things, the dollar remains in a particularly vulnerable spot and a further drop isn't out of the question.</p><p>Despite the fall in bond yields and the recent softer inflation numbers, markets are still convinced of a 25 bps Fed rate hike later this month. That hasn't been a comfort to the dollar but it at least it is hinting that "well, things could have been worse".</p><p>If anything else, I'd keep an eye out on the USD/JPY chart above. That could be a helpful guide to see if the dollar can at least try to put a stop to the latest rout. And if not, add to the selling pressure next week.</p>

This article was written by Justin Low at www.forexlive.com.