USDX (USD Index)
U.S dollar index dropped below 97.50 support and shake the weak hand out of the market yesterday. The downward movement lost strength when the Fed announce interest-rate and future projection. Initially, the market placed more than 60% chance the Fed will proceed with rate-cut. After the event, the odds turned lower to 50%.
We have a bullish pin bar pattern on the daily chart which is a continuation pattern. If the bull could close the index above previous day high then we will have a bullish continuation.
However, the market might wait until tomorrow to move the index as we will observe job data.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 29-3 May 2019
Technical Analysis
EUR/USD
We have bearish confirmation after EUR/USD rejected from the level near the top of the bearish channel. The pair closed as bearish pin bar pattern. Fortunately, there was no close below 1.1185. EUR/USD still has chance to move upward by bouncing from 1.1185 tough the odds are low.
We expect the pair to continue its bearish movement below 1.1185 and test 1.1120.
today critical levels to watch:
Support: 1.1185, 1.1120
Resistance: 1.1200, 1.1300
GBP/USD
No clue yet on GBP/USD next direction. The pair closed at daily SMA 200 and today it stuck near the averages. Traders will continue waiting for a trigger for GBP/USD next movement.
Today Critical level to watch:
Support: 1.3000, 1.2800
Resistance: 1.3125, 1.3250
USD/JPY
USD/JPY extend its bearish movement below SMA 200 and reached the level near 111.00. A bounce happens before the end of day and we have the pair closed near its opening level. Today, the bull is in control and currently challenging SMA 200. If USD/JPY could return above SMA 200 by the end of the week then we could expect a further rally in the coming week.
However, a close below SMA 200 will lead the pair to trade between 111.00 and SMA 200.
Today critical levels to watch:
Support: 111.00, 110.50, 110.00
Resistance: 112.00, 112.50, 112.14, 112.50
AUD/USD
No reason to take short positions at the current level as AUD/USD drop again near 0.7000. The pair is challenging the round number levels and might take longer to break. Long positions have a good risk-reward ratio but risky as bearish pressure still strong.
Wait until either breakout lower or false breakout with long-tail happens before jump in positions. Take a short position only when the price retraces upward.
Today critical levels to watch:
Support: 0.7000
Resistance: 0.7080, 0.7160, 0.7200