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Reaction to otherwise firm U.S. inflation report was somewhat a surprise. Risk sentiment improved this week and we seem to have returned to the previous regime where the dollar is used as a funding currency, despite rising interest rates. EUR/USD appears ready to break above the longer term trendline.
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USD/JPY poised to break to the downside
Risk sentiment failed to recover so far with Nikkei falling in the early morning and European markets opening weak. USD/JPY is breaking below the trendline (area) drawn off of 2012 and 2016 lows. 2017 low (107.30) is another strong support area to watch. The pair looks a bit oversold in the very short term but a successful break could easily mark a couple of big figures to the downside.
EUR/USD breaks above 1.21
European currencies outperformed today. EUR/USD gained about 100 pips and is poised to post a highest weekly close in three years. 1.2165 (50.0% retracement of the 2014 - 2017 decline) is a big area. A break above would open door to 1.23 - 1.2330 (LT trendline support, 2008 low) and put 1.25 (LT trendline resistance) into focus.
FX markets will soon open for the year
Most markets are still closed but will soon kick off into what I expect to be a volatile year ahead. U.S. dollar index posted a lowest monthly close in three years while EUR/USD closed 2017 above 1.20. Will we see a repeat of January 2015, just in reverse?
BTW: I'd like to express my gratitude to Dukascopy for providing outstanding products, services and support, and to fellow community members for their support, suggestions and ideas. I wish everyone a healthy, happy and successful year ahead!
BTW: I'd like to express my gratitude to Dukascopy for providing outstanding products, services and support, and to fellow community members for their support, suggestions and ideas. I wish everyone a healthy, happy and successful year ahead!