USDX (USD Index)
Although it moves higher than previous year high, the U.S dollar index retreated and moved lower below its consolidation area. Fortunately, there is bullish indication formed near the lower part of consolidation range. The bullish engulfing pattern is not triggered yet; the price still needs to close higher above the orange area.
Following the new line up, there is possibility U.S dollar index will hit lower before job data release and return inside after the result released.
News to watch
08.15 AM U.S ADP Non-Farm Employment Change, estimate 171k increase
08.30 AM U.S Unemployment Claims, estimate 262k benefit claimers
10.00 AM U.S ISM Non-Manufacturing PMI, consensus reading of 56.6
11.00 AM U.S Crude Oil Inventories, expectation deficit of 1.8 million barrels compared to previous week.
For full outlook for this week, you can follow Forex Outlook For The Week 2 – 6 January 2017
Technical Analysis
EUR/USD
EUR/USD pushed through the green consolidation range in H4 chart. The price formed a bearish engulfing pattern which indicates reversal, but at the current level, it might also find support near the top of the green area. Traders need to wait until next candle close, to determine if bounce valid or not.
Today critical level to watch:
Support: 1.0479, 1.0435, 1.0400, 1.0366, 1.0350
Resistance: 1.0500, 1.0562, 1.0580
GBP/USD
GBP/USD moved higher as U.S dollar retreat around the board. The pair has a range between 1.2200 – 1.2388 and it might get tighter between 1.2300 – 1.2330 before job data. A close above 1.2388 and also the H4 SMA 200 will open room for the pair to move toward 1.2500.
Today critical level to watch:
Support: 1.2300, 1.2270, 1.2230, 1.2200, 1.2000
Resistance: 1.2333, 1.2375, 1.2400, 1.2500
USD/JPY
Bullish pin bar formed near the 115.90 support level and this flip level protected the price from further depreciation. USD/JPY might reverse upward from the current level.
Today critical level to watch:
Support: 116.00, 115.90, 115.00, 114.20
Resistance: 116.80, 117.80, 108.00, 118.80, 120.00, 121.48
AUD/USD
AUD/USD finally reach the selling area mentioned in the previous analysis. It is one of the best places to take a short position in the pair, especially after it formed bearish pin bar near the 50% retracement. A close below 0.7286 is favorable for the bear.
Today critical level to watch:
Support: 0.7286, 0.7239, 0.7225, 0.7195, 0.7160
Resistance: 0.7300, 0.7370, 0.7400