FX Analysis: Strong Month For The Dollar?

L ast week was a bit of a choppy week. We started to see some correctional moves in current trends. It will be interesting this week to see if these manifest into full blown reversals or are just overdue corrections from quite stretched trends.

I am focused on some of the majors this week, with potential for further weakness in the GBP/USD, AUD/USD and potential reversals in EUR/USD and USD/JPY; February could end up being a strong month for the Dollar if we see further follow through in these crosses.

Draghi is speaking on Tuesday following his visit to the Spain. We expect the same rhetoric on progress being made in Spain, however, watch for further comments on the Euro and its current levels. If Mario bashes the current levels again and hints of intervention on increases we could see a broader sell off again. If this happens watch risk pairs for a general risk off push. If the Euro does tumble also watch the Pound which could be supported by flows from the EUR/GBP cross.

It will be interesting to see what BoE Governor King says on Wednesday in regards to QE and the economic progress in the UK which seems to have faltered, especially after Carney's appearance in front of the Treasury Select Committee.

BoJ on Thursday in the early hours of the morning (GMT) could be a spark for the Yen crosses. Starting to look Bearish but need some confirmation, otherwise signifcant risk of an uptick.

EUR/USD
Weekly signs still point to a Bullish trend in the EUR/USD, however sentiment towards the pair is waning, therefore the 1.33 support level will be key if the up trend remains in tact.
Personal Bias: Bullish
Support: 1.3300
Resistance: 1.3500 / 1.3650 / 1.3710
My Strategy: Look for buying opportunities on a retracement and rejections off of support to the 1.33 mark.


GBP/USD
Pound put in a rather choppy week last week as it found support and was helped by EUR/GBP flows.
We are looking for signs of the Bearish momentum to continue.
Personal Bias: Bearish
Support: 1.5680 /1.5630
Resistance: 1.5825
My Strategy: Remain Bearish under the 1.5825 mark, will look for short entries on 4hr chart below this aiming for the recent lows and support levels.
A Break and hold above this level would negate my current bias.


AUD/USD
Aussie has looked relatively heavy recently and continues to look like it has a lot of room to move lower.
I remain Bearish but wait for clear entry signals.
Personal Bias: Bearish
Support: 1.0250
Resistance: 1.0300 / 1.0350
My Strategy: Look for sell signals on 4hr or Daily Chart, looking for test of the 1.0150 mark


USD/JPY
Yen strengthened slightly last week but still remains weak. With the BoJ on tap potentially in the Asia session on Thursday this weeks price action could be key.
Personal Bias: Neutral
Support: 92.00 / 91.00
Resistance: ?????
My Strategy: Looking for short entry signals below the 92.00 mark, aiming for 88.00. Would consider strong rejections of recent highs around the 94.00 mark for an initial smaller entry.