The week was positive for the greenback. The US dollar index managed to set new highs near $93.50.
Weekly Forex Outlook: April 9-13
The US dollar rose during the most part of last week but suffered on Friday as a report showed that in March the US economy created the fewest jobs in 6 months.
Trade tensions between the United States and China come on and off. All in all, such uncertainty creates a negative environment for the US dollar. At the same time, it’s not completely bad as traders hope that the world’s two largest economies will ultimately reach a compromise.
Technical positions of the American currency don’t look strong. The US dollar index rose to the area of 90 last week. There’s a “Harami” pattern on the daily chart and a candle with long upper shadow on the weekly timeframe.
EUR/USD managed to find support just above 1.2200. This level is saving the euro from a deeper decline that could take it to 1.2150 and 1.2085. Bullish engulfing on the daily chart allows some recovery. Resistance is at 1.2345 and 1.4210.
British pound is driven up by the optimism about the Brexit deal and the expectations that the Bank of England will soon raise the interest rate. GBP/USD will likely make another attempt to test 1.4190 and the 200-week MA at 1.4240. This is a serious resistance.
USD/JPY had a good week but ran into resistance around 107.50. There’s a heavy bearish Ichimoku Cloud above the pair on the daily chart, so the way up won’t be easy. Decline below 106.60 will open the way down to 105.90.
For USD/CAD, there’s a “Head and Shoulders” pattern on the daily chart. As long the pair is trading below the neckline at 1.2820, we’ll target levels at 1.27 and 1.26.
There will be several important events for the USD – PPI on Tuesday, CPI and the Federal Reserve’s meeting minutes on Wednesday and consumer sentiment on Friday. We’ll hear from other major central banks as well. The RBA Governor and the ECB president will speak on Wednesday and governors of the Bank of Japan and the Bank of England will make an address on Thursday.
This is Forex trading plan for Thursday, May 24…
It seems like the rally of the greenback has ended. On Monday, the US dollar index tested levels near $94, however, closed below $93.50.
Last week was highly positive for the US dollar, so, it managed to end the Friday’s trading above 93.50.