After strong gains, dollar could be at a risk of a pullback
Daily Forex Market Preview, 21/11/2016
The US dollar index posted one of its strongest gains having shown little to no pullback in the rally that saw the dollar index rise above the 100 psychological level. With a slow and short trading week ahead for the US and the FOMC and durable goods orders being the two main important economic releases of note, the dollar could be seen posting a near-term pull back. Initial support is seen at 99.00.
EURUSD Intra-day Analysis
EURUSD (1.0601): The euro closed on Friday below 1.0600 support level, trading near the lows of early December 2015. The single currency fell sharply from 1.1100 in early November and posted one of the longest losing streaks, falling by nearly 4.2% in a span of 9 consecutive days. As price trades near 1.0600, the risks remain equally balanced. A convincing bullish close above 1.0600 on the daily session could signal a near-term correction, but a continued decline will see EURUSD fall towards 1.0500 support extending the declines further. The Stochastics on the daily chart remains strongly in the oversold level currently.
GBPUSD Intra-day Analysis
GBPUSD (1.2335): GBPUSD has been closing bearish for the past five daily sessions although the pace of declines has been moderate. After prices remain range bound within 1.2400 - 1.2500, GBPUSD closed below the lower range on Friday. This could keep the cable under pressure as the price is likely to slide towards the next support seen at 1.2250 - 1.2224. In the near term, a pullback to retest 1.2400 for resistance will confirm the move to the downside.
USDJPY Intra-day Analysis
USDJPY (111.08): USDJPY is trading near a 7-month high after a strong bullish close on Friday saw prices breaking above the 110.00 resistance level. Minor support is seen forming near 109.76 - 109.50 which should keep the prices supported to the upside. However, a breakdown below this support could signal the start of a correction as the dollar could slip towards 105.50 support level. The Stochastics remains at the overbought level, but watch for price to remain consolidated above 110.00 for the near term.