The dollar once again tried and failed to break out above an important technical level. That said we’ve already had such a strong turnaround that it’s not surprising that we’re having a bit of a pause in the rally.

On Wednesday it was the commodity currencies that benefited the most from a USD that struggled. The CAD, AUD and NZD all gained ground on the USD and for all of them, it was a big turnaround. The last few weeks have been particularly rough on the exporters. A larger than anticipated draw in oil inventories added to the upside.

Yesterday we saw the AUD come under more pressure after a weaker than anticipated wage growth number. This morning we will find out more about the state of the Aussie economy when we get a better look at the employment figures.

At the same time, the EUR/USD really struggled once again. Mario Draghi is providing little confidence at the moment. The Euro broke out below support at 1.1850 and there appears little buying interest at the moment.

USD Tests Resistance

The key support and resistance levels from yesterday remained strong throughout the US session. The key resistance at 93.50 continued to hold down the buyers at mentioned earlier.

94.10 is really the next upside target, but much will depend on the price action. We are trading at highs that haven’t been seen or some time so I don’t think a pause in the uptrend will be a bad thing for the time being.

I would also consider buying the pullbacks around 92.40 as that would give us a decent risk-reward compared to trying to buy breakouts as we don’t have all that much room above and we could easily hit 94.10 intraday.