USDX (USD Index)
There is no surprise move in U.S dollar index as it continues hovering near the low. There is little sign of bullish sentiment building, but no confirmation yet. The market foci are BOJ conference and ECB interest-rate decision today.
BOJ conference provides clue that the bank will hold their policy unchanged for some time which should weaken Yen. Traders could use this moment to look for a position in USD/JPY especially when U.S dollar index near yearly low. ECB rate decision scheduled on 07.45 followed by press conference. This conference might put Mario Draghi on edge after his hawkish comment in the previous meeting. It would do no good for Euro if he reiterated all of the hawkish comment and sound dovish.
News to watch
04.30 AM UK Retail Sales consensus increase of 0.4% monthly
07.45 AM EUR Minimum Bid Rate
08.30 AM ECB Press Conference
08.30 AM U.S Unemployment Claims expectation 245k benefit claims in the previous week.
For full outlook for this week, you can follow Forex Outlook For The Week 17 – 21 July 2017
Technical Analysis
EUR/USD
Today EUR/USD situation is similar to the flip of a coin, and it could move either way. The next direction of EUR/USD will be decided by ECB Mario Draghi today. The market expects more hawkish comment from the ECB President and confirmation by removing taper will jolt EUR to the upside.
The odds are high for the bull, and traders could look for long position near 1.1500 with a stop below 1.1390. The hawkish comment should bring the pair to break 1.1712 (Aug’15 high).
Today critical level to watch:
Support: 1.1500, 1.1400, 1.1347, 1.1300
Resistance: 1.1600, 1.1615, 1.1700, 1.1712
GBP/USD
GBP/USD retreat today from 1.3000 as U.S dollar index make relief rally before ECB conference. The pair might move down toward 1.2900 before finding support, and it will decide next direction following EUR/USD after ECB conference.
The odds favor for a bounce higher, but an upset in the conference might pull all major pairs down against U.S dollar.
Today critical level to watch:
Support: 1.2940, 1.2900, 1.2850
Resistance: 1.3000, 1.3030, 1.3046, 1.3070
USD/JPY
USD/JPY could become the star of next month as the pair found support at 50% Fibonacci retracement. Currently, it will move up to test 112.50, a break above the 112.50 could trigger further buying toward 114.50. Traders could look for a long position at the current level or after the break of 112.50. The position will have a stop below 111.50.
Today critical level to watch:
Support: 112.00, 111.64, 111.00, 110.50
Resistance: 112.50, 113.00, 114.00, 114.35, 114.50
AUD/USD
The reaction showed near 0.8000 on AUD/USD daily chart, the pair starts declining and currently testing previous day low. It is not a surprise as the market unwinding their position before ECB press conference which boosted U.S dollar. Technically, traders suggested waiting until the candlestick close before jumping in position. The day still long and the bearish candlestick could turn into bullish by the end of the day.
Today critical level to watch:
Support: 0.7900, 0.7834, 0.7750, 0.7690, 0.7660
Resistance: 0.8000