Weekly analysis (GBPUSD, GBPJPY, XAUUSD, EURUSD, USDJPY, DXY) 10/1/2022 – 14/1/2022
Following NFP’s release last Friday, the dollar index has been bearish and is approaching a support level at 95.635. We are anticipating for it to bounce off the support level and head for 96.654 level. This would mean we will be looking for shorting opportunities in pairs like GBPUSD, EURUSD, XAUUSD and buys on USDJPY should the currencies fail to rival the dollar in the week ahead.
Looking at the pair on D1 we are the top of the downward channel once again. Narrowing down to H4, the top of the channel coincides with a very strong resistance point at around 1.36993. At this point we are looking for a short entry should the resistance hold continuing the overall downtrend on the daily chart. If the bulls break the level we’d be looking at a short rally up to test the next resistance point at 1.36886.
The pair is still very bullish. We’re looking for the pair to rise up to 158.004 to look for reversal signals to short the pair. The level is quite important as it is the highest point we have seen since October 2021 and earlier before that January 2018. Alternatively we could see the bulls break the level in a bid to go higher and if that happens the safest bet would be to wait for a retest.
Looking at the Daily chart, at first glance the pair has been ranging between 1.11899 and 1.13824. From a fundamental perspective, following the NFP release on Friday with the employment change being way lower than was expected, the pair pushed higher and we might see a break of the range to the upside in course of the week. If the bulls fail to break the range to the upside we might see bearish pressure at the top of the range at 1.13824 pushing price down.
From a technical perspective, gold formed a double top on H4 and broke the neckline at 1797.17. The pair is currently pulling back to the neck line and we will be waiting for a sell signal to short the pair to the next support around 1765.57.
Following the anticipation of the DXY index to bounce of the support at 95.500, we looking out for buy setups on USDJPY. Currently the pair seems to be in a pullback state and approaching a supply level at 115.205. We shall be waiting to see if the supply level holds and for the break of the downward trend line before getting in on a buy.