USDX (USD Index)
Nothing could change the direction of U.S dollar index yet which is bullish. The index extends the bullish streak to the fourth day and currently gaining above 96.10 resistance. We expect the index will continue its upward movement and test the red trendline before any significant correction. Although the index has surpassed 96.10, it is possible the bear will return and closed the index below 96.10 by the end of the day.
At the current time, it is better to hold long position or stay sideline until strong bearish reaction seen. The Fed Jerome Powell will give a speech later today which might influence U.S dollar direction.
News to watch
07.00 PM Fed Chair Powell Speaks
For full outlook for this week, you can follow Forex Outlook For The Week 4-8 February 2019
Technical Analysis
EUR/USD
EUR/USD closed lower and getting near to 1.1300 – 1.1360 support area. There is no higher high printed on the chart which is unfavorable for the bull. If the bull could not make the pair bounce from 1.1360 and print another lower low below 1.1300 then EUR/USD might be open for further weakness.
Today critical level to watch:
Support: 1.1360, 1.1300
Resistance: 1.1400, 1.1500, 1.1580
GBP/USD
A close below daily SMA 200 and 1.3000 is a major blow for the bull. GBP/USD now expected will resume its bearish trend and test 1.2800. However, it is still possible for the bull to prevent the bearish trend by making a close above SMA 200 by the end of the week.
Today Critical level to watch:
Support: 1.2800, 1.2625
Resistance: 1.3000, 1.3250, 1.3300
USD/JPY
The resistance at 110.00 proven itself as tight resistance and USD/JPY rejected from it. Currently, the pair weakens below previous day low and could continue to test 109.00 also trendline. A close below 109.00 and the trendline is unfavorable for the bull and must be avoided if USD/JPY will continue its uptrend.
Today critical level to watch:
Support: 109.00, 107.40, 105.00
Resistance: 110.00, 110.50, 111.00
AUD/USD
Selling with strong momentum happen in AUD/USD today. The pair rejection from SMA 200 gaining momentum and manage to bring the pair below 0.7160. We have a trendline to watch, if the pair closed below the trendline then we expect another test on 0.7160 followed by rejection.
Traders could take a short position near 0.7160 with a tight stop above it.
Today critical level to watch:
Support: 0.7000
Resistance: 0.7160, 0.7200, 0.7300, 0.7330