Weekly Technical Analysis For January 28th to February 1st, 2019
Last week, the European Central Bank kept key rates and forward guidance unchanged but downgraded its assessment by stating that the balance of risks has moved to the downside. Dovish Draghi has put selling pressure to the EUR/USD pair. However, the euro recovered loses versus the greenback last Friday and closed the week above the daily level of 1.1367.
The Fed is scheduled to hold its policy meeting on Thursday. There is no rate change expected from the Fed, keeping it in a range between 2.25%-2.5%. Traders focused on how much further the tightening cycle has to run. If the Federal Reserve projects a more aggressive interest rate hike, the greenback would rise sharply.
Addition to Federal Reserve Rate Decision, The U.S. Nonfarm Payrolls will be significant for the U.S. dollar this week.
U.S. Nonfarm Payrolls is expected to see 160K jobs created after rising 312K the previous month. Unemployment Rate is expected to stay at 3.9% Average hourly earnings will be another release to be followed closely at the same time and are expected to come out at 0.3%, which is lower than previous month reading of 0.4% The U.S. Jobs Report is an important determinant of Fed rate hike in the upcoming decisions. An upbeat employment report will point to an improving U.S. Economy and support the case for higher interest rates in 2019.
The 1.1367 main support level is so critical for the EUR/USD pair. As long as the pair stays above 1.1367, on a daily basis, the upward movement may continue and we will see resistance levels at 1.1446 and 1.1531. On the other hand, if the pair falls back below 1.1367, the next support level will be placed at 1.1262.
Support: 1.1367 – 1.1262 – 1.1188
Resistance: 1.1446 – 1.1531 – 1.1607
Sterling has extended gains against the U.S. dollar and the GBP/USD pair has been rising for six consecutive weeks. Last week’s U.K. press reports suggested that the DUP party had privately agreed to support Theresa May’s Plan B Brexit if it includes a clear time-limit to the Irish backstop.
We will focus on the daily resistance level of 1.3241. In order for the bullish action to gain more momentum, it needs to break out 1.3241 and stays above that level on a daily basis. Otherwise, we might see a taking profit action and the support levels can be found at 1.3152 and 1.3050.
Support: 1.3152 – 1.3050 – 1.2961
Resistance: 1.3241 – 1.3338 – 1.3447
The Gold price found buyers above the 1276 daily support level and moved up significantly last week. Watch out for the major resistance level of 1307. In order for the bullish action to gain more momentum, it needs to break out 1307 and stays above that level on a daily basis. Otherwise, we might see a taking profit action and the key support level will be at 1291.
Support: 1291 – 1283 – 1276
Resistance: 1307 – 1319 – 1330
The USD/JPY upward movement was limited at the 109.90 key resistance level last week. The daily 109.35 support level will give us a clear direction for the USD/JPY pair. If the pair breaks down 109.35, we will see 108.78 as a next support level. On the other hand, if the price moves up above 109.90, the next resistance level can be found at 110.86.
Support: 109.35 – 108.78 – 107.65
Resistance: 109.90 – 110.86 – 111.66