WEEKLY REVIEW - GREENBACK TUMBLES AS US RATES APPROACH NEUTRAL

Jan 4, 2019

GREENBACK PRESSURED

The US dollar index gave back early week gains after Federal Reserve Chair Jerome Powell noted that the FOMC feel that the United States benchmark interest rate is approaching a neutral level. FED Chair Powell’s statement is also seen as a sign that the US central bank are now starting to acknowledge recent criticism from US President Donald Trump, who had accused the Federal Reserve of hiking US rates to quickly. The euro and antipodean currencies made the strongest gains against the US currency, after previously languishing towards the worst trading levels of the year so far.
The USDJPY is only bullish while trading above the 113.15 level, key resistance is located at the 114.02 and 114.54 levels.
If the USDJPY pair trades below the 113.15 level, key support is found at the 112.20 and 111.40 levels.

CRYPTOCURRENCIES RECOVER

Cryptocurrencies rebounded from depressed levels this week, after opening the trading week under intense selling pressure. Bitcoin had fallen to a fresh 2018 trading low, hitting $3,507, before recovering back above the key $4,000 level, while Ethereum settled above the $100.00 level after finding support from the $97.00 level. Litecoin recovered above the $30.00 benchmark, after earlier sinking to its lowest trading level since June 2017, and briefly losing its place as the seventh largest cryptocurrency by market capitalization. The rebound in the cryptocurrency market was seen as a short-term correction, with most major digital currencies remaining in a technical downtrend.
The BTCUSD pair is bearish while trading below the $4,700 level, further losses towards the $4,000 and $3,500 levels seem possible.
If the BTCUSD pair moves above the $4,700 level, further upside the $5,000 and $5,200 resistance levels remains possible.

BOE WARNING

The British pound traded in a narrow range against the US dollar this week as the Bank of England issued a dire warning over the economic consequences of Brexit. The Bank of England offered the economic forecast, in the face of deep uncertainty over the United Kingdom business and trading climate post-Brexit. The GBPUSD pair had dipped towards the 1.2700 support level, before recovering on broad-based US dollar weakness. Investors shrugged-off the outcome of the recent EU Summit, as EU leaders approved British PM Theresa May’s Brexit deal, which is now expected to be voted-down in UK parliament on December 11th.
• If the GBPUSD pair moves below the 1.2750 level, key technical support is found at the 1.2695 and 1.2662 levels.
• The GBPUSD pair is only bullish while trading above the 1.2882 level, key resistance is found at the 1.3100 and 1.3315 levels.

GERMAN DATA WEAKENS

The euro currency staged a recovery against the US dollar and the British pound this week, despite another series of weak macroeconomic data from the German economy. The EURUSD pair recovered towards the 1.1400 resistance level, despite softer than expected German IFO, CPI Inflation and Economic Confidence data. The single currency also looked past the threat of potential trade tariffs from the United States on German car imports, with reports surfacing that the Trump administration are considering imposing trade tariffs as soon as next week.
The EURUSD pair is bullish while trading below the 1.1400 level, key resistance is found at the 1.1500 and 1.1650 levels.
If the EURUSD pair trades below the 1.1400 level, key support is found at the 1.1270 and 1.1216 levels.