After giving a strong bullish movement in the starting of the week by continuing the gaining streak the U.S. Dollar Index touched the weekly high of 95.78 and mostly traded with bullish movement last week. The U.S. Dollar index ended the last week on a positive at 95.31 levels after testing the high of 95.78 near to the medium term resistance zone near 96.00 levels. The movement in the U.S. Dollar Index was supported by the upbeat FOMC comments which kept the market favorable for bulls.
However, the last two trading sessions of last week showed the relevance of the resistance zone near 96.00 levels. The upcoming week is expected to be a volatile week for the U.S. Dollar Index and is expected to test the resistance zone of 96.00 levels in near term as the bulls are still in control of the market as the bears do not have any strong level to jump back in and claim their position in the market in near term. By keeping in mind the public holiday on Monday in U.S., Canada and Japan we are expecting majority of movements in the U.S dollar to take place only after Monday as the only important data PPI and CPI data is due later on this week which is expected to keep the market in a range before giving a big move.
On technical technically ground The Greenback is in showing signals of a possible corrective movement in near term. However, the corrective bearish movement is expected to be limited as the overall market sentiments are still positive for the U.S. Dollar which can result in continues bullish movement in the U.S. Dollar Index after a possible correction. However, the movement in the U.S. Dollar Index is expected to be affected by the development of the trade relationship between the U.S. and China
Last week was a highly volatile week for Euro where the currency mostly traded with bearish sentiments and lost its ground in the starting of the week and continued its bearish movement by taking a hit by strong US Dollar and negative Turkish budget story which kept the investors on the back foot for the Euro.
On the technical ground the pair EUR/USD is giving strong signals of a potential big fall in the price as the bearish pressure is still intact in the pair with can result in a sharp fall in the price in near term. However, there is a possibility of a short corrective wave in this pair and we can expect a fall after the test of the level of 1.1550 levels. Also the absence of any major economic event this week in European front the majority of the movement is expected to be dominated by the strong movement of U.S Dollar which can keep the movement in the EUR/USD of the pair on a lower side.
The pair USD/JPY had given a sharp corrective turn last week after making high of 114.56 and ended the week marginally higher from previous week’s close at 113.72. The pair USD/JPY had traded majorly with bearish sentiments in the last trading sessions of the week by and settling off all the gains made it made in the starting of the week.
Technical outlook: On the technical ground the pair USD/JPY is trading currently at a very crucial level and it is forming a head and shoulder pattern which is visible in a higher time frame which is indicating a potential bearish movement in the pair. If USD/JPY continues to fall and break the short term support zone near 113.00 levels then this can result in a much deeper correcting on a weekly basis.
GBP/USD was amongst the most volatile pair last week after giving bearish movement in the starting of the week the pair had sharply recovered in the last trading sessions and ended the week on a positive note. The pair GBP/USD is expected to be highly volatile in the coming week by keeping in view the upcoming Brexit decision which has the power to keep the market movement under pressure in the near term.
On the technical ground the short-term downtrend in the GBP is still intact and the pair can test the support zone near 1.3000 levels in near term. The break of this support zone with a negative development in the Brexit matter can result in a deep correction in the GBP/USD pair as the Pound is still week across the board and the overall market sentiments for this pair is still negative by taking an in consideration the Political concerns and the Brexit final negotiation.