The Dollar Slams Into Resistance, Weekly Forecast

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USD/JPY Weekly Price Forecast – US dollar slams into resistance

The US dollar initially pulled back a bit during the week, breaking below the 50 week EMA. However, we turned around to show signs of life there and shot straight towards the resistance barrier that I have shown on the chart. At this point, the area between the ¥111.50 level and the ¥112 level is still massive resistance and it’s going to take a bit of pushing to get through. If we get a daily close above that level, then I think that the market could go looking towards the ¥113.50 level. That is an area that has a significant bout of resistance built in.

USD/JPY Video 08.04.19

On the other hand, if we failed to break out above there, it’s likely that the market could pull back towards the 50 week EMA again, or even the ¥110 level which is massive support. Looking at this chart, it’s likely that we see more consolidation than anything else. Overall, it’s likely that we will see volatility more than anything else. Keep in mind that the pair is highly sensitive to risk appetite, and perhaps even the S&P 500 overall. As we are pressing against major resistance in that market, it makes sense that we would struggle over here as well. If we get a break above the 2900 level in the S&P 500, then this market would probably follow right along to the upside. If the S&P 500 breaks down and cannot break that level, then it’s very likely we get a pullback. It would also makes sense that we consolidate in both markets, which has more of a negative connotation, but maybe only short term.

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AUD/USD Weekly Price Forecast – Australian Dollar Slams Into Resistance

The Australian dollar has rallied during most of the week but found enough resistance near the 0.6940 level to roll back significantly on Friday. There is also the 50 day EMA just above and quite frankly at this point it makes quite a bit of sense that we are simply going to hang in this area. The Australian dollar is highly sensitive to the US/China trade situation, which although there has been a bit of progress made in that direction, the reality is that nobody is still completely clear as to what’s happening. Because of this, it looks like the Australian dollar will continue to see a lot of volatility and downward pressure, so at this point it is going to be interesting to see what happens next.

AUD/USD Video 16.12.19

If we were to break above the 0.6950 level, then it’s likely that the market will go looking towards the 0.7050 level. It would also signify that we could see a bit of a trend change in the cards, and that should continue to cause buyers to come in and try to push higher. This needs to be in congruence with the trade situation getting better between the Americans and the Chinese as the Australians provide so much in the way of raw materials for the Chinese economic engine and of course the construction industry there as well. At this point, the agreement is seeming to be very unclear, so I suspect that the Aussie will continue to languish in this general vicinity. This lends itself to be more in short term trading circles than longer-term investors.

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The Dollar Slams Into Resistance, Weekly Forecast

The Buck Stops Here

The U.S. dollar made a stellar mover higher over the past few weeks but that move has come to an end. Trade hopes, U.S. economic dominance, and a supportive FOMC were not enough to break the DXY out of its trading range. The index is now showing resistance at the top of the range, near the $97.50 level, where is has been halted many times in the past. The weaker than expected labor data last week is one reason for the halt, the fact all major world currencies are weakening along with the global economy is another.

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Dollar traders are going to have an event-filled week. The economic calendar is full and includes CPI, PPI, manufacturing, retail sales, and housing data. CPI and PPI are going to be the most important, inflation is what drives the FOMC to change rates. Inflation has been subsiding, weaker than expected reads could pull support from under the dollar in a hurry.

India Poised For Growth

The Indian Rupee has been gaining strength versus the dollar over the past few months and is set to test a major support line. The pair has been pressured lower by improvement in the state-run lending facilities and hopes a round of new elections will solve political issues. The USD/INR is indicated lower and likely to hit 69.50 versus the dollar at least. A move below that level would be bullish for the Rupee and could take the pair to 68.00 or 67.00

The Pound Regains Traction

The British pound has been on uncertain footing versus the dollar but may be regaining its traction. The pair is supported by hope the UK won’t let a hard-Brexit happen. The UK parliament is about to vote on the crucial May Brexit Deal, if they don’t pass it all bets are off. For now, support is at the 1.3000 level and looks strong, a move up to 1.3200 and 1.3300 is expected.

Yen Poised To Move Big

The Yen is poised to move big but which was is questionable. The USD/JPY has been trending higher over the past few months and looks like it could move higher again. It is testing support at the 30 day moving average where a bounce is very likely to form. The question is if the dollar can maintain its strength versus the yen or if it will succumb to global pressures and break support. A fall through the EMA would be bearish and could take the pair down to 110.00 or 108.00.

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