US Dollar Index
Last week was a tough week for the US dollar index as it traded with strong bearish sentiments thought the week pushed by the negative sentiments created by the trade tensions between the U.S. and China which are now believed to be grown in a trade war as China is also ready with the terrifies to retaliate against the U.S. trade protectionist policy announced by Donald Trump. The bearish pressure was also fueled through the week with mostly negative U.S. economic reports and the positive NFP was also failed to give bulls a chance to take back the movement as the unemployment rate which touched the 4% mark kept the investors on the back foot. looking forward there are various fundamentals which are going to affect the market next week including the FOMC Member Bostic and Williams Speaks in the middle of the week and CPI data which are going to shape the market this week for USD.
On the technical ground the U.S dollar index is trading below the medium-term support zone and it is expected to continue its short-term bearish movement next week. the next immediate support zone for the U.S. dollar index is near 93.30 levels followed by the major support zone of 92.50 levels and the immediate resistance zone is near 94.10 levels and 95.20 levels.
Weak U.S dollar helped this pair to gain its lost ground and gave it a chance to cross its medium-term bearish trend. Last week this pair had given a strong bullish movement which is expected to be continued next week as well as the blooming trade tensions between the U.S and China is expected to continue putting bearish pressure on the U.S. dollar which will help the EURO to gain some positive momentum as well as the speeches of ECB President Draghi on Monday and Wednesday followed by the ECB Monetary Policy Meeting Accounts due on Thursday is expected to keep the speculations alive which can be beneficial for Euro as bullish are now trying to take control of the market now and they can utilize the increased volatility created by these economic events to get some momentum in the EUR/USD pair.
On the technical ground, the EUR/USD pair is making a reversal pattern on the higher time frame. The support in this pair is falling near the zone 1.1500 and resistance zone is near 1.1850 levels and this pair is showing bullish signals which make us believe that this pair may test the resistance zone of 1.1820 in near-term and a strong breakout of this level can result in a bullish movement which can last for the rest of the month of July to give a positive closing of this month. However, the upcoming speech by Draghi and the U.S. inflation figures due next week is expected to play an important role in the price movement of EUR/USD pairs.
GBP/USD had managed to give a strong bullish movement in the middle of the week after a choppy start of the month of July and ended the week on a positive note supported by the weak U.S. dollar movement on the back of trade tensions between U.S and China. This pair is currently trading near to its resistance zone near 1.3320 the next resistance zone in this pair is falling near the zone of 1.3430 levels and the support zone is near the level of 1.3150 followed by the major support zone of 1.3030 levels.
On the technical ground, the long-term bearish trend in the pair GBP/USD is still intact and strong and it is expected to keep the bulls in check. The resistance zone near 1.3320 levels is strong and it is expected to hold the bulls and give bears another chance to take control of the market.
However, the break of this resistance can result in a strong bullish movement which can push the price up to test the next resistance zone near 1.3430 levels in near term. But on the other hand, the political uncertainty and development in the matter of Brexit are putting constant bearish pressure on this pair along with the downtrend which is still in play we are expecting this pair to give a negative closing of this week.
Despite the negative movement in U.S. dollar, the USD/JPY pair remained under pressure last week. USD/JPY pair had traded sideways last week under its medium-term price channel.
This pair started the month of July with slightly positive movement but lost its ground and ended the week on a slightly negative note on Friday.
On the technical ground, the USD/JPY pair is still in a bear market and the long-term downtrend in this pair is still in play which is going to keep putting bearish pressure on the price. the near-term support zone on USD/JPY is near 109.30 and the resistance zone is near 111.10 levels which is expected to act as a hurdle for bulls as the downtrend in USD/JPY pair is still intact and it had demonstrated its power in the past as well which can push this pair to test the support zone of 109.30 levels again and a break of this level can result in a deeper correction which can lead the bears to test the next support zone near 108.50 levels in near term.
By accounting the lack of economic event due this week from Japan front apart from the BOJ Governor Kuroda speech due on Monday the majority of movement in the pair is expected to derive by the movement of US dollar which is also showing weakness that makes the bearish movement in the pair even more prominent.