Last week was a very volatile week for The U.S. Dollar Index which had tested the November 2017th highs at the starting of the week by continuing its bullish movement and then shifted back to negative territory however the U.S. dollar index managed to close the week on a slightly positive note.
This week is expected to be a tough week for U.S. Dollar on both technical and fundamental grounds due to worries over the recent President Donald Trump’s tariffs which had created negative sentiments in the market where everybody is afraid of the negative impact of a potential trade war and the resistance zone near 95 levels which had shown its strength in recent times indicates a potential bearish movement in coming week.
The USD is technically looking weak and it is showing signals of a potential bearish movement in coming week, however the June rate hike which is well anticipated by the market after the recent employment and inflation reports which is showing a green signal for a rate hike which can support the U.S. dollar and limit the downside movement.
The political jitters in Italy and Spain pushed the EUR/USD to yearly lows but weak U.S dollar and strong eurozone inflation reports helped the EUR/USD pair to regain its lost ground in the middle of the weak. However, the pair had closed the week with a slightly negate territory after overwhelming U.S. employment and PMI numbers released on Friday of last week.
This week is expected to be a tough for Euro as the absence of any major economic event this week the majority of movement is expected to be affected by the movement of U.S. dollar and the political scenario in the Italy and Spain.
Technical outlook: On the technical ground the EUR/USD had tested its support zone near 1.1550 levels and it can retest this level in coming week as the long-term downtrend is still intact which can result in a deeper drop in this pair if it continues to stay below 1.1700 levels.
In short term the EUR/USD pair is showing signals of a potential bearish movement which can push the price to test the support zone near 1.1550 levels, however, the support is strong and it can give bulls a chance to push the price up again.
The pair USD/JPY had given a sharp recovery in the last trading session of last week after consolidating between 109.00 and 108.50 levels supported by the strong U.S employment and PMI reports which helped the pair to give a flat closing of last week.
Technical outlook: On technical ground the USD/JPY pair is expected to trade with bullish sentiments as the expectation of June rate hike which can support the U.S dollar can keep the yen under pressure also the bullish trend in USD/JPY pair is still intact which can push the price to test the resistance zone near 111 levels in near term.
However, a break of the support zone near 108 levels can result in a much deeper correction near to the 106 level mark which creates a limited downside risk in this pair.
The pair had managed to give a slightly bullish movement in the last week after a continues drop and tested the support zone near 1.3250 levels and ending of the week on a slightly positive note after making a weekly low of 1.3204.
Technical outlook: On the technical ground, the downtrend in the GBP is still on the move and the pair can test the support zone near 1.3250 again in near-term and a break of this level can result in a deeper fall which can lead the price near to the level of 1.3000 levels in near term. The Pound is still not strong and the overall sentiment on GBP/USD is still negative on the back of the concerns over the Brexit which can continue putting bearish pressure in this pair.
USD/CAD was also stayed volatile throughout the week and closed last week which slightly bearish movement after making a weekly high of 1.3049 and ended the week at 1.2949 levels.
Technical outlook: On the technical ground the pair had tested resistance zone near 1.3050 levels and this pair is expected to continue its bearish movement this week also and test the levels near 1.2750 levels in near term.
However, BOC Gov Poloz Speech and the trade balance report due in the middle of the week can give a positive push in this pair which can result in another test of 1.3050 zones in near term.