USDX (USD Index)
The U.S. dollar index fell sharply in today’s trading after the release of US inflation data which was below estimates. Inflation has fallen and the market is now speculating the Fed will cut interest rates early. However, the key to the next move will be waiting for the Fed meeting tonight. Will the decline continue below 103.50 and the index finally enters a bearish phase? Or will the index stay near the daily SMA 200 and bounce back up?
EUR/USD
EUR/USD climbed back above the daily SMA 200 and 1.0800 today. The pair is again inside the 1.0800 – 1.0900 area and will try to continue strengthening. As written in the previous analysis, when there is a close outside the 1.0800 – 1.0900 area, the direction of the pair’s next movement can be determined. Even though it closed below 1.0800, the release of inflation data and the imminent Fed interest rate announcement made this bearish movement only a temporary movement. Traders will wait for the reaction after the Fed’s announcement for further confirmation.
Today’s critical levels to watch:
Support: 1.0800, 1.0650, 1.0500
Resistance: 1.0900, 1.1000, 1.1120, 1.1185, 1.1300, 1.1360
GBP/USD
GBP/USD did not move down much after the rejection from 1.2800 and today there was a sharp increase. The pair broke above 1.2800 and has a chance to close above it. For now, traders will wait for the daily close after the Fed’s interest rate announcement. If the pair turns down again and closes in the 1.2625 – 1.2800 area then it could be that the next movement will be bearish. Looking at the current data, the trend is bullish but traders will still be careful.
Today’s critical levels to watch:
Support: 1.2625, 1.2200, 1.2100, 1.2000
Resistance: 1.2800, 1.3000
USD/JPY
USD/JPY weakened again in today’s trading but there is still no lower low point formed. The position of the pair is still bullish for the long term and just like other pairs, traders will wait for the results of the Fed’s announcement today. Will the next move be confirmation of a change in long-term bearish direction? Or will the pair continue its strengthening and form a higher swing high point?
Today’s critical levels to watch:
Support: 150.00, 147.00, 145.00, 142.00, 141.00
Resistance: 155.00
AUD/USD
AUD/USD surged up to 0.6700 today with very strong bullish momentum. Traders seem to assume that a decline in U.S. inflation figures will encourage the fed to lower interest rates more quickly. Even though it is currently bullish, traders will wait for the news release and also the daily close for further confirmation.
Today’s critical levels to watch:
Support: 0.6500, 0.6350, 0.6170, 0.6000
Resistance: 0.6700, 0.6750, 0.6820, 0.7000