USDX (USD Index)
U.S dollar index settled inside 93.00 – 94.00 range as expected in the previous week. However, there is bullish sentiment brewing, and the index closed at the higher end of the range. If the bull continues to show its upward pressure, we might see a breakout above the range.
The chance for an upward breakout is high as the market enter holiday season where trading volume lessen. However, the breakout validity might lessen. This week, traders could watch either breakout above the range or rejection, and continuation of range bound trading between 93.00 – 94.00.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 18 – 22 Dec 2017
Technical Analysis
EUR/USD
EUR/USD rejected from top of range 1.1820 and proceeded to test 1.1710 support level. The pair expected to continue its movement inside 1.1710 – 1.1820 with a bearish bias this week. If the bear manages to clear 1.1710, EUR/USD might drop further toward 1.1580.
Today critical level to watch:
Support: 1.1710, 1.1650
Resistance: 1.1820, 1.1850, 1.1925, 1.2000
GBP/USD
The bullish buildup in GBP/USD erased in one swoop by the bear in the previous week. The bounce from 1.3300 – 1.3330 area rejected at 1.3450 and back to square one. The outlook for this week is bearish but still contained inside 1.3300 – 1.3450 area. The bull needs to defend 1.3300 support. Otherwise, GBP/USD might tumble toward 1.3000.
Today critical level to watch:
Support: 1.3300, 1.3250
Resistance: 1.3342, 1.3400, 1.3450, 1.3500
USD/JPY
The bull manages to close the price above 112.50 and barely escape the sell-off below 112.00. Bearish pressure might diminish after this event, and the bull could press the pair upward to test 114.50. Traders could use 112.50 as the level to look for a long position with a stop below 112.00.
Today critical level to watch:
Support: 112.50, 112.00, 111.60
Resistance: 113.20, 114.50
AUD/USD
Traders who placed short position at daily SMA 200 could reap their reward as AUD/USD experience profit taking. The pair has support at 0.7640 which might not be able to hold the bearish pressure this week. If the bearish sentiment strengthened, traders could hold the position with 0.7550 as the initial target.
Today critical level to watch:
Support: 0.7630, 0.7550, 0.7500
Resistance: 0.7690, 0.7750