USDX (USD Index)
The weakness of U.S dollar index brought the index to the new low today and reached 88.80 major support. It looks like the level shows some reaction and bounce the price to its opening level. If the bull could continue to push the price upward, we might see a bullish candlestick formed and further upside to the previous year low.
News to watch
07.45 ECB Minimum Bid Rate
08.30 ECB Press Conference
For full outlook for this week, you can follow Forex Outlook For The Week 22 – 26 Jan 2018
Technical Analysis
EUR/USD
ECB is due to announce an interest-rate decision today. When the news released, it should trigger a big market reaction in EUR/USD. The pair could either move upward or start a correction. Following the location of U.S dollar index, if reversal happens it could follow two scenarios.
First, a false breakout higher above recent high followed by quick reversal downside. Second, ECB shows up with dovish comments, and the pair falls sharply. Traders will monitor ECB announcement today to determine the central bank sentiment.
Today critical level to watch:
Support: 1.2300, 1.2200, 1.2100, 1.2070, 1.2000
Resistance: 1.2500
GBP/USD
GBP/USD bull is charging without any pause and closed near the 1.4250 resistance level. Today, the pair continue upward and poking level above 1.4300 before turning down. The market is waiting for ECB interest-rate decision to determine next direction of major currencies against U.S dollar.
Today critical level to watch:
Support: 1.4000, 1.3850, 1.3800, 1.3600
Resistance: 1.4250
USD/JPY
USD/JPY bear has no trouble to cut through the support level and reach 109.00 in one swoop. The level is a good level to look for a long position, but bearish momentum is strong, and traders might want to tread carefully. The bull needs a close above 109.00 and a bullish reversal candlestick to lessen the bearish pressure.
Today critical level to watch:
Support: 109.00
Resistance: 110.50, 111.00, 111.60
AUD/USD
AUD/USD broke free from 0.8000 and widened the distance from the broken resistance. Under the current situation, traders will stand pat and wait for a correction before further upside. The level near 0.8000 is the level to watch for next position.
Today critical level to watch:
Support: 0.80000.7970, 0.7875, 0.7800
Resistance: –