Last week was a volatile and bullish week for The U.S. Dollar Index, the index had traded near to the yearly highs and made a weekly high of 95.19 after testing the support near 94.00 levels in weekly basis and managed to close the week on a positive note by gaining 0.48 points on a weekly basis.
On the technical ground, this week is a very important week for U.S. Dollar index as the index is on a very crucial level on technical grounds. The dollar index which measures the strength of the U.S. Dollar is trading near to the yearly highs and resistance zone around 95.00 levels which had shown its relevance in the recent times by slamming the index down four times after the first test on June till now.
USD INDEX Daily Chart
On the other hand, the blooming tensions between the U.S. and China had increased in recent time after the announcement by the U.S. officials to slam 25% tariffs on Chinese goods worth nearly $200 billion which ignited the movement by China to retaliate against the tariffs. The negative sentiments created in the market by the fear of a potential trade war can negatively impact the U.S. dollar index which can lead to a potential bearish movement in the coming week.
on the fundamental front the coming week is expected to be a silent week for the Euro on the back of the absence of any major economic report or speech form Europe apart from the less impact June German Factory Orders report due on Monday or the June German Industrial Production report due on Tuesday
The disappointing second-quarter Eurozone GDP report pushed the EUR/USD on the bearish territory and the negative sentiments created by the GDP report continued to rule the market moves through the week which leads to a weekly drop of 100 pips in this pair.
By keeping in mind the upcoming silent week in terms of the economic report in Euro front this pair is expected to continue its bearish movement in the coming week as well. However if the U.S. Dollar experience a turnaround then it is expected to give a cushion to the EUR/USD pairs falling movement.
Technical outlook: On the technical ground the EUR/USD is trading near its support zone of 1.1550 levels with bearish pressure which can push the price down and break this support zone near 1550 in coming week as the long-term downtrend is still intact which can result in a deeper fall in this pair if it continues to stay below 1.1700 levels in near term.
Taking heat from the sluggish Brexit talks the GBP/USD pair traded bearish last week by continuing its downtrend and dropped nearly 90 pips. On the technical ground, the downtrend in the GBP is still on the move and the pair is expected to test the support zone near 1.2950 again in near-term and if the pair breaks this level than it can result in a deeper fall which may lead the price near to the level of 1.2900 levels in near term. The Pound is still not showing any strong bullish signal and the overall sentiment on GBP/USD is still negative on the back of the concerns over the Brexit which can continue putting bearish pressure on GBP/USD in near term.
The pair USD/JPY had faced some bearish pressure in the recent times and dropped to test the support level of 111.00 and given a sharp recovery after testing the support zone but failed to maintain the bullish movement and dropped again in the last week however it manages to give a slightly positive closing of the week.
Technical outlook: On the technical ground the USD/JPY pair is expected to trade with bullish sentiments in the coming week as the long-term bullish trend is still intact in this pair as well as the bullish movement of the U.S. dollar is expected to support the bullish movement in this pair in near future. The bullish U.S dollar can keep the yen under pressure supported by a strong level of 111.00.
However, a break of the support zone near 111.00 levels can result in a deeper correction in this pair and in order to maintain a healthy bullish trend this pair have to trade above this key level.