The US midterm election played a major role in the movement of the U.S. Dollar index last week where the U.S Dollar index turned negative in the starting of the week but give a sharp recovery in the middle of the week and managed to close the week on a slightly positive note. In the midterm election where Democrats won the House and Republicans kept there holds in the Senate, the mix results kept the market wondering and the movement clearly showed indecision between bears and bulls.
The US ISM Manufacturing PMI helped the bulls as it crossed the expectations of analysts which showed a strong growth and held up above 60 points.
The U.S. Dollar Index traded with a slightly positive note last week where it started the week on a negative note and continued the week with mixed emotions and grabbed some points in the middle of the week and managed to give a slightly positive ending of the week by gaining 0.44 on a weekly basis.
This week is going to be an important week for the Dollar Index as it is trading at a very crucial level near the midterm resistance zone. The movement of this week will decide the fate of the U.S. dollar and clear the trend of the index.
On the technical grounds, the Greenback is showing signals of a potential bullish movement in the coming future if it manages to cross the short term resistance zone near 97.00 levels in the coming week. We can expect the coming week to be a volatile week for the U.S. Dollar Index and if the Index will cross the resistance zone of 97.00 in coming trading sessions by continuing the short term bullish trend then it may test the next resistance zone near 99.00 levels in coming future. However, the movement in the U.S. Dollar Index can be influenced by the developments in the blooming trade war between U.S. and China along with the development in the Brexit matter which is not showing any positive movements in the recent times which can influence the market sentiments largely.
Last week was a volatile week for Euro where the currency gained some points in the starting of the week due to the negative movement of the US Dollar but faced resistance near the 1.1480 levels and dropped in the last trading sessions by setting off all the gain it made in the starting of the week and gave a negative closing of the week.
The upcoming week is also expected to be a tough week for Euro as on technical ground the pair is showing signals of a potential bearish movement in coming future the EUR/USD pair is expected to test the support zone near the level of 1.1300 in near-term and if the EUR/USD pair crosses the short term support zone near 1.130fd0 in coming week then it can result in a much deeper drop in the pair.
On the economic front the next week is a comparative silent week for Japanese yen in the absence of any major economic reports in JPY front apart from the Prelim quarter on quarter GBP report due on Wednesday.
On the technical ground, the pair is still trading with bullish sentiments by continuing its short-term bullish trend with is still intact after giving a short bearish movement and currently consolidating with slightly bullish sentiments. However, the stress created by the trade war between China and the U.S. is expected to dominate the movement of this pair in the coming future.
The last few weeks for this pair were highly volatile on the back of the Eurozone economic stress, Italy budget and Brexit negations which kept the investors and traders in confusion. The indecision of the traders is clearly visible in the weekly charts where we can see the push and pull between the bulls and bears which resulted in an upside-down weekly closing.
On the technical ground, the downtrend in the pair is still intact; we are expecting this bearish trend to kick in this week which can result in a steep fall in this pair. The downtrend in the GBP is still on the move and it is expected that the pair which had experienced resistance recently can give a negative movement this week again and start falling in near term, as the Pound is still not getting any positive push which is keeping the overall sentiments for this pair negative.
On economic front there isn’t any positive development in the Brexit negotiations which is continuing to put bearish pressure in this pair and the bulls are still sitting on the bench and waiting for a positive outcome to jump back up again in the market to give this pair some relief from the recent drop.