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A Weekly Technical Perspective on DXY, GBP/USD, AUD/USD

A Weekly Technical Perspective on DXY, GBP/USD, AUD/USD

In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter heading into the yearly open. Review the Weekly Strategy Webinar for an in-depth breakdown of these setups and more.

DXY Weekly Chart

DXY Price Chart - Weekly Timeframe

Notes: The dollar index opens the year just above support at 91.93 with the 2017 low-week close just lower at 91.33- the immediate downside bias is at risk near-term while above this threshold with initial resistance eyed along the median-line (blue) around 93.10 backed by 93.89. This level is defined by the 2016 low-week reversal close and converges on the 200-week moving average into the close of the week.

Bottom line: Expect side-ways to higher price action while above 91.33 - ultimately we’ll be looking for a more sizeable recovery to offer better entries on the short-side targeting 89.62. Broader bearish invalidation for the downtrend stands at 95.90-96.00.

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GBP/USD Weekly Chart

GBP/USD Price Chart - Weekly Timeframe

Notes: We’ve been tracking this well-defined ascending pitchfork formation since last year and heading into the yearly open there are some levels to know. Interim resistance stands at the 2016 high-week reversal close at 1.3675 with bullish invalidation for the broader uptrend now raised to the 1.33-handle, where the December lows converge on basic slope support.

Bottom line: The immediate focus is on a break of the 1.33-1.3675 range with the topside bias vulnerable while below. A break lower would shift the focus lower towards 1.3036 and the 52-week moving average at 1.2950s- areas IF reached would be of interest for exhaustion / long-entries. In the event price breaks higher, look for subsequent topside objectives into the median-line near the 38.2% retracement at 1.3952.

It’s worth noting that seasonal tendencies are pretty bearish for Sterling heading into the yearly open with COT data (Commitment of Traders) showing a considerable build in long-exposure on large speculators- suggests bearish.

See how shifts in GBP/USD retail positioning are impacting trend- Click here to learn more about sentiment!

AUD/USD Weekly Chart

AUD/USD Price Chart - Weekly Timeframe

Notes: Aussie’s reversal at key slope support was well-documented last year and heading into 2018 the broader focus does remain higher. That said, prices are now testing the long-term 200-week moving average and a weekly close above this threshold is needed to keep the immediate advance viable targeting the 2017 high-day close at 8059.

Bottom line: The immediate advance may be at risk here sub-7886/98 but the trade remains constructive while above 7630. Interim support eyed at 7749. From a trading standpoint, I’m looking lower into the monthly open but ultimately a larger set-back would offer favorable long-entries within this confines of this broader uptrend.

Check out our New AUD/USD 2018 projectionsin our Free DailyFX Trading Forecasts

Previous Weekly Technical Perspectives

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at or Click Here to be added to his email distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.