US Dollar Index
The US dollar index traded with bullish sentiments last week pushed by the positive fundamental sentiments build by the Federal Reserve along with gaining US bond yields which helped the greenback to perform well last week. However, the US dollar index had lost some ground and experienced resistance near 90 levels after making a high of 90.17 on Thursday but manages to close the week on a positive note by giving a weekly closing of 89.81 levels on Friday. looking forward there are various fundamentals which are going to affect the market next week including the testimony by Fed Chair Jerome Powell and prelim GDP data which are going to shape the market this week for USD.
On the technical ground, the US dollar index is still in a long-term bearish trend which we can clearly see in the higher time frame charts and this trend is still intact. However, the recent improvement in the US economy had pushed the Greenback on the bullish territory and made it test the nearest resistance of 90.00. In near term, we are expecting the US Dollar Index to test the resistance zone of 90 again however the recent high of 9th Feb can act as a hurdle for bulls and that makes the road for bulls a bit tough which makes the long-term forecast for US dollar index to remain bearish.
With strong greenback, the euro had continued its bearish movement last week on a negative note near 1.2300 levels. The EUR/USD pair is making a reversal pattern on a higher time frame which is indicating even deeper bearish movement in the pair however the support near 1.2240 levels can stop the bears to take control in the pair. The break of this support and a drop below 1.2200 level can result from lasting fall which can make it test the 1.2100 levels again in near term. The upcoming speech by Draghi and inflation figures due next week are going to play a very important role in the movement of euro and US dollar index which is showing short-term bullish trend will be a deciding point for EUR/USD pair’s movement.
With a very choppy movement, GBP/USD pair ended the week below 1.40 levels with bearish movement. The GBP/USD pair gave a very volatile movement last week with lots of speculation in the pair which indicates a potential big movement in near term in this pair. With mixed sentiments, the GBP/USD pair is expected to trade between the channel of 1.4000 and 1.3800 levels and the breach of these levels along with the Dollar movement support in the same direction can result in a massive movement in the pair in coming future.
A close below channel support which is near to 1.3800 handles, can trigger a move lower toward 1.3600 levels. On the other hand, a break above descending channel resistance with is falling near 1.4000 levels can result in a move which can retest 1.43 levels.
Despite the positive movement in USD, the USD/JPY pair remained under pressure last week. USD/JPY lost all its gains made in the starting of the week on Thursday and made a flat closing of last week.
On the technical ground, the USD/JPY pair is still in a bear market and the near-term support turned to resistance zone 108 levels are expected to act as a hurdle for bulls as the downtrend in USD/JPY pair is still intact and it had shown its relevance with recent price fall.
By keeping in mind the lack of economic event from Japan this week the majority of movement in the pair will be driven by the movement of US dollar which is also showing weakness that makes the bearish movement in the pair even more supported.
Looking ahead the USD/JPY pair is expected to test the levels near 106 zones in coming future and a breakout below the recent low of 105.50 can result in an even deeper fall in this pair. However, if the US dollar will continue its bullish movement with the support of upcoming testimony by Fed Chair Jerome Powell and prelim GDP data then it can test the resistance near 108 levels again in near term.
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