Dollar index weekly analysis

The Dollar index has made no real progress for the last year as price is again where it was at the end of 2018. Price is stalling around a major Fibonacci retracement, with weakly bearish divergence signs.

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Red lines - bullish channel

Blue line - bearish divergence

The Dollar index is trading inside a bullish channel since mid 2018. Price has not broken the lower channel boundary that was recently tested. This is a sign of strength on behalf of the bulls. However we should not ignore that the RSI is diverging and we are at the major 61.8% Fibonacci retracement level. This is a potential reversal area so we need to keep a close eye on last week's lows. Holding above it will be a sign of strength for bulls. Breaking below it will be a big win for bears.

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GBPUSD remains under pressure

GBPUSD topped two weeks ago just above 1.35 when we mentioned that a 5 wave move higher was about to complete. Price has since then pulled back below 1.30.

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Red lines - bullish medium-term channel

GBPUSD despite the sharp pull back from 1.35 remains inside the bullish medium-term channel. Channel support is at 1.2750-1.2770 area. This week I expect price to start lower and then bounce towards 1.31 before moving again lower towards the lower channel support. Although I believe the entire upward move from 1.1958 has been completed, the corrective phase we are currently in has still lots of room to unfold and is not over yet.

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USDJPY bulls need to be very cautious

USDJPY has managed the last two weeks to climb above 109 and re-test the November highs. The RSI is providing several warning signs for bulls.

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USDJPY is showing rejection signs at the 109.70 area. The RSI is showing bearish divergence signs and rejection at the green resistance trend line. This implies that we should favor the bearish scenario for a move lower as long as price is below the 109.70-109.90 resistance area. Major support at 108.40 is key. Breaking below this level will open the way for a move towards 107.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of EURUSD

EURUSD was again unable to reclaim and stay above 1.1180. Price got rejected another time at the downward sloping resistance trend line and previous highs.

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Black line- resistance trend line

Blue line- support trend line

Red line - bearish divergence

EURUSD approached the downward sloping resistance trend line and the October highs. There was a bearish divergence also as shown in the Daily chart above. Price got rejected and fell below 1.11. Holding above the blue trend line is crucial for bulls. As long as price is above this area bulls remain hopeful. However bulls will need to show signs of strength by breaking and staying above 1.1180.

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In Ichimoku cloud terms EURUSD is back testing cloud support. It is very possible to see price bounce off this support area and not break inside or below the Kumo. This would be a bearish sign. Bulls want to retake 1.11 at the start of the week in order to get more strength to move higher towards 1.1130 which is the next important Daily resistance. Bouncing off the cloud would be ideal for bulls according to the Ichimoku cloud indicator. This would also be highly probable....but bulls need to be aware not see price break below the cloud.

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Ichimoku cloud indicator analysis of Gold

Gold price has made no real progress to the upside the past week. Gold price managed to climb back towards the major resistance of $1,490-$1,500 but in the end it got rejected. A bearish sign.

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Red line - resistance trend line

Green line - support trend line

Gold price is challenging the medium-term downward sloping red trend line resistance. Trend remains bearish as price is still below this trend line. Support is at $1,460 where we see the green upward sloping trend line. As long as price holds above this level, bulls still have hopes for a break above the $1,490-$1,500 resistance and a move towards $1,550-$1,600. If price breaks below support we expect $1,430-$1,400 to be seen. Near resistance we prefer to be sellers as the risk reward favors the bearish scenario.

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In ichimoku cloud terms we confirm that price is below major resistance as price is still below the red Kumo (cloud) inside the bearish channel. Price is above the tenkan- and kijun-sen indicators which provide support at $1,467-72. A daily close below this area will be a bearish sign increasing the chances of breaking below $1,460.The material has been provided by InstaForex Company - www.instaforex.com