The U.S. Dollar Index mostly traded sideways last week and ended the week on a negative note and this week also the Dollar Index had given a negative movement on the starting of the week with broadly negative sentiments due to worries over the daily in the most awaited corporate tax cut.
The Greenback is technically looking weak and it is showing signals of a potential bearish movement in coming future and we expect the coming week to be volatile for Dollar Index and if the Index will cross the support zone of 94.00 in coming trading sessions then it may again turn negative and give a disappointing closing of this month, however the movement in the U.S. Dollar Index largely depends on the US federal reserve governor Yellen speech along with ECB president Mario Draghi speech and BOE and BOJ representatives speeches who all are set to speak at ECB’s conference scheduled on Tuesday.
The market is expected to be highly volatile on Tuesday and investors will keep a close eye on the statements by all the central bank’s representatives to get a further clue on the movement of the market.
A series of ECB President Draghi speaks will play an important role in the movement of the pair. This week Draghi will speak on Tuesday and also on Friday and any important direction on the economic front will result in a big movement in the pair.
Last week was a volatile week for Euro where the currency dropped in the starting of the week due to the hawkish movement of US Dollar but it managed to regain ground and recovered the losses made in the starting of the week and managed to give a flat closing of the week.
The next week is also expected to be a tough week for Euro as Draghi is not at all in a hurry to reveal the QE tapering which can keep the movement of the pair in a tight range.
Technical outlook: On technical ground the EUR/USD pair is showing some positive signals and it can test the level of 1.1280 in near term if it crosses the short term resistance zone of 1.1200 to 1.1215 in the starting for the week, however the resistance is strong and it can give bears a chance to decide the fate of the pair.
The Japanese inflation figures due next week is a major event where investors keep an eye on as the sideways movement of the pair is giving a sign of a big movement in near term.
USD/JPY pair is trading at a very crucial level and consolidating in a tight range of 111.80 to 111.00 which can be seen in the daily levels and weekly candles are facing resistance and it is indicating a potential bearish movement in near term.
On the technical ground, the pair is trading in a downward channel which is still intact as the weekly and daily candles are clearly showing the rejection of 112.00 levels and this can result in a fall which can lead the pair near to the level of 108.60 in near term.
However, if the bearish movement of USD will continue then this can comfort the JPY and the pair can again give a sideways movement in the coming week.
The pair had managed to give bullish movement in the ending of the week but the downtrend in the pair is which can be seen clearly on the weekly chart is still an area of concern. The downtrend in the GBP is still on the move and the pair can stop its gaining movement near to the resistance level of 1.2770 and again start falling as the Pound is still not strong and the overall sentiments for the pair is still negative on the back of the Political concerns and the start of the Brexit negotiation which can put bearish pressure on the pair.