USDX (USD Index)
U.S dollar index made a false breakout and settled inside the triangle pattern on its daily chart. It is an upset situation for the bear but still in expectation. The market is not certain yet the Fed will undergo “less rate-hike” route. Job data will become the vital hint for The Fed interest-rate decision.
Meanwhile, the long-term rate continues flat while the market frets over an inverted rate curve. If the Fed raises interest-rate too fast and the long-term rate continues flat then we will get the inverted rate curve. It is a leading signal for recession.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 3 – 7 December 2018
Technical Analysis
EUR/USD
EUR/USD could not maintain the level above 1.1360 and closed below it for the second day. Today, the pair still could not break above the resistance and looks will make a third close below it. We think the projection of EUR/USD will span between 1.1300 – 1.1360 until Friday job data.
Today critical level to watch:
Support: 1.1300, 1.1200, 1.1120
Resistance: 1.1360, 1.1500, 1.1580
GBP/USD
GBP/USD seems to progress lower day by day below 1.2800 and now traded at the middle of 1.2625 – 1.2800 range. There is a rebound in U.S dollar index which might give pressure for the pair at least until the end of the week. Traders who want to take position might want to wait until the pair reach 1.2625 before placing any positions.
Today Critical level to watch:
Support: 1.2625
Resistance: 1.2800, 1.3000, 1.3050, 1.3125
USD/JPY
USD/JPY averted a breakdown below the triangle pattern. It bounced from the bottom of the triangle today and looks will settle the day near 113.20. There is no change in the medium-term outlook which is ranging inside the triangle. Currently, traders will target the top of the triangle and wait for breakout or rejection reaction.
Today critical level to watch:
Support: 113.00, 112.50, 112.00
Resistance: 113.20, 114.50, 115.00
AUD/USD
We have a possible bullish channel established on the AUD/USD chart. The pair is moving down after rejection from top of the channel and the level near daily SMA 200. Will it find support at the bottom of the channel and bounce upward to test the daily SMA 200 again?
Today critical level to watch:
Support: 0.7200, 0.7160
Resistance: 0.7300, 0.7330, 0.7400