USDX (USD Index)
U.S dollar index on the move after it bounced from 94.00 and closed the day as a bullish engulfing candlestick. Testimony by Fed Chair Powell is the driving force Yesterday. In front of the Senate, Jerome Powell made it clear The Fed plans to raise rate once each three months.
The upward momentum continues today and almost reach 95.50 resistance. Today, Jerome Powell will give another testimony. Expect more bullish movement in U.S dollar index if the tone of testimony is hawkish.
News to watch
08.30 AM U.S Building Permits forecast annualized 1.33 million permits issued.
10.00 AM Fed Chair Powell Testifies
10.30 AM U.S Crude Oil Inventories, estimate a deficit of 3.4 million barrels.
For full outlook for this week, you can follow Forex Outlook For The Week 16 – 20 July 2018
Technical Analysis
EUR/USD
EUR/USD rejected from 1.1710 and formed a bearish engulfing pattern which suggests a valid rejection. The bearish pressure continues today below 1.1640. The market is expecting a hawkish comment from Jerome Powell testimony. Without any change in the sentiment, we should see EUR/USD hanging at 1.1500 – 1.1580 soon.
Today critical level to watch:
Support: 1.1600, 1.1580, 1.1500
Resistance: 1.1650, 1.1710, 1.1820
GBP/USD
A clean rejection from the top of bearish channel put GBP/USD back on its bearish track. The pair is getting near to 1.3000 and ready to test it. Under current momentum, it is possible the pair will break 1.3000 on the first test. Today will be the crucial day to watch as breakout or reversal could happen at the same time.
Today critical level to watch:
Support: 1.3000
Resistance: 1.3100, 1.3250, 1.3300
USD/JPY
USD/JPY surpass 112.50 and continue its climb to 113.20. There is nothing to do at the current time, the only possible trade to take is long from 112.50. The short position is not suggested as the trend has shifted to bullish.
Today critical level to watch:
Support: 112.50, 111.00, 110.50
Resistance: 113.00, 113.20
AUD/USD
AUD/USD traded lower, joining other dollar counterparts down. The pair has not left the green box area which means the ranging projection intact. Long position will wait until bullish pattern formed near the bottom of the green box.
Today critical level to watch:
Support: 0.7330
Resistance: 0.7400, 0.7500