Fundamentals

Heading on to the third trading week of the month we’re looking at a relatively quiet week from a fundamental perspective. To watch out for is the GDP report in regards to the Chinese Yuan (CNY), outlook report and speech from the Bank of Japan and England respectively, GBP and CAD CPI data, as well as employment status data for the Australian Dollar (AUD).

Technical analysis

DXY

Last week the index was pretty week and the USD had a thorough slashing in comparison to other major pairs. Towards the closing of the week the index did test the 94.678 support zone which held giving a healthy retracement to the upside. Heading into the week we a looking for a retest of the zone before heading higher.

GBPUSD

On the pound dollar we saw a clean break out of the downward channel with in which price has been ranging. Heading to the new week we’re looking for a retest at 1.13112 to go long targeting 1.38261 and 1.39850 respectively for TP1 and TP2.

GBPJPY

The bulls’ momentum on the Pound/Yen may be exhausted with the recent highs being the highest price has been since 2018. Looking at the daily chart, the resistance at 157.860 indicates a double top which coincides with overbought conditions on relative strength index (RSI) which further supports our short bias. For entry we’re looking at a retest of the resistance at 157.860 for a short position, alternatively, a break and retest of the support level at 155.077 would also give us a chance to cash in on the move down targeting 149.590.

EURUSD

In the last trading week the Euro did best the Dollar breaking the top of the range zone at 1.13837 with a lot of momentum. We are currently seeing a retest of the downward trendline on the daily which provides for an opportunity to go long with a stop loss just below the previous resistance turned support with the next resistance zone at 1.15955

XAUUSD

Looking at gold on the daily chart, the pair has been consolidating for quite a while as indicated by the consistent higher lows and lower highs. Important levels to note on the pair is the 1680, 1721 support zones, and the resistance at 1828. The overall trend on the weekly chart is long, but until price definitively breaks out of either of these levels, we are looking at prolonged ranging market for the pair.

USDJPY

Following the dollar’s weakness last week we saw the pair fail to break top of the channel at 115.695, instead price retraced breaking the support at 114.975 headed to 113.261. Presently we are looking at a retest of the bottom channel for a short term move down to the support level at 113.261 TP1 and 112.725 TP2 before resuming the long term uptrend on the daily chart. It is also important to pay attention to the outlook report on the economic status from the Bank of Japan on Tuesday as it will likely impact the performance on the market.