USDX (USD Index)
In the previous week, U.S dollar index losing ground against major counterpart and the index settled near 95.50 support level. The index supported by the daily SMA 200 and the horizontal support to close the Friday trading session with a bullish candlestick. Fortunately, the bearish pressure did not print lower low on the chart which means there is a chance for the index to stay bullish.
This week, China traders will be out on Chinese New year holiday. Also, U.S delayed economic data due to release this week. Traders will observe the impact of government shutdown on the economy.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 4-8 February 2019
Technical Analysis
EUR/USD
EUR/USD gains in the previous week capped at 1.1500 resistance. It has completed the bullish leg and needs to break the resistance to continue upward. We expect more bullish sentiment brewing in the pair as The Fed turned extremely dovish.
However, as long as there is no breakout above 1.1500 and the daily SMA 200, the pair still on track in the long-term bearish trend.
Today critical level to watch:
Support: 1.1400, 1.1360, 1.1300
Resistance: 1.1500, 1.1580
GBP/USD
GBP/USD trend is mostly dependent on Brexit development. Recently, the pair broke above the daily SMA 200 and maintain the position above it. Technically, we expect a bounce from the averages soon. If the pair bounce from the averages then 1.3250 – 1.3300 is the upside target.
Today Critical level to watch:
Support: 1.3000, 1.2800, 1.2625
Resistance: 1.3250, 1.3300
USD/JPY
The pair traded under bearish pressure in the previous week and slide below 109.00. But, it manages to recover at the end of the week and close as a bullish candlestick. If the bull could continue to push the pair upside then USD/JPY might reverse its short-term trend to bullish. Overall, the pair still trapped inside 109.00 – 110.50 range.
Today critical level to watch:
Support: 109.00, 107.40, 105.00
Resistance: 110.50, 111.00
AUD/USD
AUD/USD completed the bullish target at daily SMA 200 and 0.7300 – 0.7330 area. The pair weakened at the end of the week but manage to stay above Thursday low. There is two possible scenario to watch at the current time. A bearish correction scenario where the pair falls from the current level to test 0.7160 and bullish breakout above daily SMA 200 scenario. Which one will happen?
Today critical level to watch:
Support: 0.7200, 0.7160, 0.7000
Resistance: 0.7300, 0.7330