USDX (USD Index)
The latest movement of U.S dollar index challenged 76.70 resistance and showed initial rejection. There is an attempt by the bull to bring the index up today. However, the upward attempt received selling response and U.S dollar index currently traded below its opening level.
We might see the index continue lower toward 96.10 before it could turn positive again. At the current time, traders will wait for sideline while holding a small short position in U.S dollar pairs.
News to watch
For full outlook for this week, you can follow Forex Outlook For The Week 22 – 26 October 2018
Technical Analysis
EUR/USD
It is the time for EUR/USD to bounce and we are confident the pair will start it this week. If the bounce happens, then 1.1500 – 1.1580 will become the upward target. Traders will watch U.S job data at the end of the week which might give clue for future interest-rate guidance.
Today critical level to watch:
Support: 1.1360, 1.1300
Resistance: 1.1500, 1.1580, 1.1600, 1.1710
GBP/USD
Although GBP/USD in a bearish trend, we think the pair ready for a bounce from support. The situation is similar to EUR/USD where 1.2800 provided support for GBP/USD. Stop loss below 1.2800 and target between 1.3000 – 1.3050 might be the best option to choose.
Today critical level to watch:
Support: 1.2800
Resistance: 1.3000, 1.3050, 1.3100, 1.3125
USD/JPY
USD/JPY make sharp recovery today and throw the bear into disarray. The pair significantly higher and almost surpass the bearish candlestick printed on Friday. Above the bearish candlestick, there is 112.50 which could become major resistance to surpass for the bull. Nevertheless, the bullish momentum is strong and shorting is not an option yet.
Today critical level to watch:
Support: 112.00, 111.00, 110.50
Resistance: 112.50, 113.00, 113.20
AUD/USD
AUD/USD closed Friday trading session as bullish pin bar pattern but there is no strong follow through by the bull yet today. We are optimistic the pair could continue higher to reach 0.7160 before it settles next direction. Traders could place a long position with stop order below Friday low and initial target at 0.7160.
Today critical level to watch:
Support: 0.7040, 0.7000
Resistance: 0.7100, 0.7160, 0.7300