USDX (USD Index)
U.S dollar index moved up in previous day trading session. The index met its resistance at the 2016 year high 103.65 and formed a bearish engulfing pattern. The pattern is not triggered yet, and we could treat the pattern as “test the water” as it is still New Year and thin trading activities.
News to watch
04.30 AM UK Construction PMI, estimate reading 52.6
02.00 PM U.S FOMC meeting minutes
For full outlook for this week, you can follow Forex Outlook For The Week 2 – 6 January 2017
Technical Analysis
EUR/USD
The pair slides lower Yesterday and test previous year low. The bullish engulfing pattern formed and indicate possible retrace, but as long as the high of candlestick not broken, we will see another attempt to drive the price lower.
Today critical level to watch:
Support: 1.0400, 1.0366, 1.0350
Resistance: 1.0435, 1.0479, 1.0500, 1.0562, 1.0580
GBP/USD
It is important for GBP/USD to maintain its position above 1.2230. If it can maintain the position, in H4 chart we will see possible inverted shoulder-head-shoulder pattern and confirmation above 1.2300 will drive the price higher.
Today critical level to watch:
Support: 1.2270, 1.2230, 1.2200, 1.2000
Resistance: 1.2300, 1.2333, 1.2375, 1.2400, 1.2500
USD/JPY
USD/JPY moved up in yesterday trading session, and the price formed a bearish engulfing pattern when it touched the broken channel. The pattern is not confirmed yet as the price has not broken below the bearish engulfing pattern, it might move up to test the high if no break happen.
Today critical level to watch:
Support: 117.80, 116.80, 116.00, 115.90, 115.00, 114.20
Resistance: 108.00, 118.80, 120.00, 121.48, 121.68.
AUD/USD
AUD/USD creep higher and reach the top of its current consolidation range. Will it break upward? Alternatively, will it continue its downward movement after failure in re-test of resistance?
Today critical level to watch:
Support: 0.7225, 0.7195, 0.7160
Resistance: 0.7239, 0.7300, 0.7370, 0.7400