USDX (USD Index)
The bull is charging in the previous trading session as Dow Jones Industrial Averages indices logged historical 1000 points decline. The upward movement has reached the top of the blue box and aiming to break upside. However, the situation will depend on the development of the stock market.
We could see U.S futures pointing downward and suggest more weakness in the stock market. However, as long as the U.S dollar index stays inside the blue box, it is not the time to look for USD long position.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 5 – 9 Feb 2018
Technical Analysis
EUR/USD
The sentiment of the global market is in flight mode and avoid the higher risk asset. Under this situation, the market usually chooses USD, Yen, precious metals. EUR/USD might become the object of selling in this situation. Fortunately, the pair holding out and refuse to move down today.
There is room toward 1.2300 which is the expected support to reverse the bearish trend. However, the level might not be reached if U.S dollar index stays inside the blue range.
Today critical level to watch:
Support: 1.2300, 1.2200, 1.2100, 1.2070, 1.2000
Resistance: 1.2500
GBP/USD
GBP/USD bear stormed the 1.4000 support and made a close below it Yesterday. Today, the pair has difficulty to move above 1.4000 and slowly turn lower in the European session. If the bearish momentum is building up, we might see GBP/USD head lower to 1.3835 or 1.3600.
Today critical level to watch:
Support: 1.3850, 1.3800, 1.3600
Resistance: 1.4000, 1.4250, 1.4325
USD/JPY
Selling near 110.50 proven successful and yield traders more than 100 pips. Traders who sell near the level might want to set protective stop order while waiting for a break below 109.00. If the bull could maintain the pair above 109.00 today, traders might want to scale out of position.
Today critical level to watch:
Support: 109.00, 107.40
Resistance: 110.50, 111.00, 111.60
AUD/USD
The bearish pressure on AUD/USD brought the pair to close near 0.7875. Today, the bear push the pair further downward and enter 0.7800 – 0.7875 range. Traders could expect the bull attempting to build floor here. There is nothing to do yet, and traders could stay sideway until strong bullish pattern formed.
Today critical level to watch:
Support: 0.7800
Resistance: 0.7875, 0.7970, 0.8000