Weekly Technical Analysis For December 17th to 21st, 2018

Why Is This Week So Important For USD?



Euro traded lower versus the greenback after last week’s ECB Rate Decision. The European Central Bank left interest rates on hold last Thursday and reiterated that they will remain unchanged until at least summer 2019. Also, the ECB formally ended its 2.6 trillion euro crisis-fighting bond purchase scheme.

In the upcoming week, we will focus on the Fed Rate Decision and the final GDP growth for Q3 in the US. 

The Fed is scheduled to hold its policy meeting on Thursday. The market expects that the Federal Reserve will raise interest rates by a quarter point, which would be the fourth hike this year. Trades are focused on how much further the tightening cycle has to run. If the Federal Reserve projects a more aggressive interest rate hike, the greenback would rise sharply.

The US GDP for the third quarter will be published on Friday. It is expected to come out at the annual rate of 3.5%, the same as the previous month. A better than expected result will support DXY and bond yields in the US. In addition to US GDP Data; Durable Goods Orders, Housing Starts, Building Permits, NY Empire State and Philadelphia Fed Manufacturing Index will be also closely followed by traders.   

Watch out for the main support level of 1.1262. In order for the EURUSD selling pressure to gain more momentum, it needs to break down and stay below 1.1262  on a four hourly basis. Should this occur, we will see 1.1188 as a next support level. Otherwise, if the pair moves up above 1.1262, the daily resistance level can be found at 1.1367 again.

Support: 1.1262 - 1.1188 - 1.1122 

Resistance: 1.1367 – 1.1446 - 1.1531


In the next week, the BoE Policy Announcement and CPI Inflation data will be in focus in the UK.  The Bank of England is widely expected to keep interest rates on hold. Most economists think the British Central Bank will wait until May 2019 to raise rates again, assuming Britain leaves the European Union with a deal.

Moreover, the UK CPI inflation is expected to ease to 2.6%, year-on-year, from 2.7% in the previous number.

The GBPUSD pair closed last week below the key resistance level of 1.2624. As long as the price stays below 1.2623, on a four hourly basis, the bearish action may continue and we will see 1.2494 and 1.2414 as support levels. Although, if the price goes beyond 1.2624 again, the next resistance level will be at  1.2712.

Support: 1.2494 - 1.2414 - 1.2321

Resistance:  1.2624 – 1.2712 –1.2845


The BoJ Monetary Policy Decision will be announced on Tuesday. No change is expected in monetary policy. The BoJ Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision. His comments will be significant for the yen.

The USDJPY pair jumped up from the 112.46 key support level and hit the resistance level of 113.63. In order for the upward movement to gain more momentum, it needs to break out and stay above 113.63 on a four hourly basis. At this point, we will see 14.11 as the next resistance level. Otherwise, we will follow the support level at 112.46 again.

Support:  112.46 - 111.66 - 110.84

Resistance: 113.63 - 114.63 - 115.61


The Gold price found sellers from the 1249 resistance level and dropped to 235 major support level. However, as long as the precious metal stays above 1235, on a four hourly basis, the fall may be limited and we will follow resistance levels at 1243 again. Although, if the price drops below 1235, the support level can be found at 1225

Support: 1235 - 1225 - 1215

Resistance: 1243 - 1249 - 1256

16 Dec 18 (Sun)

08:53 pm

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