USDX (USD Index)
Even though the index is under pressure this week, it sticks near 97.20 support all the time and currently attempting to retake 97.50. If the index could close above 97.50, we will expect it continue upside toward the broken trendline. Increasing tension on North Korea might scare the market and help boost U.S dollar against other major currencies.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 22 – 26 May 2017
Technical Analysis
EUR/USD
EUR/USD retreat from the 1.1240 resistance level and back to this week low near 1.1160. The bull is under pressure after shot of geopolitical shakeout by President Trump. The President mentioned North Korea big problem and possibility to take action upon it. This is mostly U.S dollar initiated movement and inline with the market anticipation of next month interest-rate hike.
In the medium-term, we might see EUR/USD near the bottom of its upward trendline around 1.1100.
Today critical level to watch:
Support: 1.1160, 1.1125, 1.1100, 1.1000, 1.0960
Resistance: 1.1220, 1.1240, 1.1266
GBP/USD
Sudden fallout in GBP/USD after the poll show PM Theresa May lead getting narrow against the opponent. The UK is going for the vote on 8 June, and confidence on the PM decline as UK economic gauge weaken. Currently, the pair is near the daily SMA 200 which might act as support. Traders might want to wait for sideline and see if the rate of decline is accelerating or decrease when the price hit the averages.
Today critical level to watch:
Support: 1.2800, 1.2670
Resistance: 1.2855, 1.2900, 1.2934, 1.3000
USD/JPY
USD/JPY test of the channel resulted in rejection today. The price modestly lower after growing tension caused by North Korea. If the tension gets higher, it might put the pair continue lower toward the target 110.50 and later 109.00.
Today critical level to watch:
Support: 111.00, 110.50, 109.00
Resistance: 112.50, 113.00, 114.00
AUD/USD
The Bull is working hard after the price slid below previous day low. It is trying to maintain the price above the black trendline, and so far it works out. If the bull could maintain the price above the trendline, it will setup for consolidation between the green and black trendline. Otherwise, a move lower toward 0.7330 is expected.
Today critical level to watch:
Support: 0.7450, 0.7421, 0.7400, 0.7330, 0.7290
Resistance: 0.7500, 0.7550