Dollar ended the week broadly lower, except versus Sterling, after US president-elect Donald Trump disappointed the markets by not giving any details on his policies during the first post election press conference. Dollar index reached as low as 100.72 before recovering to close at 101.18. Meanwhile, the greenback also took out key near term support level against Euro, Yen and Canadian Dollar, which carries some bearish implications. However, treasury yields staged a strong rebound on Friday, which could provide some relieves to Dollar bullish. 10 year yield closed at 2.380, after dipping to as low as 2.309, comparing to prior week's close at 2.418. Stocks were also resilient with NASDAQ closing a fresh record of 5574.12. DJIA stayed in tight range of around 200 pts. below 20000 handle. There are still prospects for the greenback to strike back is Trump delivers in his inauguration on January 20.

Technically, Dollar index's correction from 103.82 extended lower last week and breached 55 day EMA (now at 101.04), and 38.2% retracement of 95.88 to 103.82 at 100.79. Such decline is still seen as a near term corrective pull back only. And hence, strong support should be seen at 100.79 fibonacci level and bring rebound. A break above 102.95 resistance will turn focus back to 103.82. However, considering bearish divergence condition in daily MACD, sustained break of 100.79 will argue that whole rise from 91.91 is also finished . And in that case, deeper fall should be seen to 99.43 support and below.

10 year yield seems to be losing some downside momentum ahead of 55 day EMA (now at 2.281). Immediate focus will be on 2.432 minor resistance this week. Break there would possibly bring retest of 2.621 resistance. At this point, we don't expect an upside breakout yet and more consolidation would be seen. Meanwhile, below 55 day EMA will likely extend the correction lower to 38.2% retracement of 1.336 to 2.621 at 2.130.

S&P 500 lost much momentum as it faces resistance from upper channel line. Nonetheless, SPX is holding well above 2233.62 key near term support level. Hence, the rise fro 2083.79 is still intact. Such rise is still expected to continue to next medium term projection level at 61.8% projection of 1074.77 to 2134.71 from 1810.10 at 2465.14. But a break of 2233.62 will bring deeper fall to lower channel line (now at 2128).

Hence to conclude, which the greenback was down, it isn't out yet. Resilience in stocks and yields would provide support to Dollar in general. But Dollar's fate will heavily depend on whether Trump would turn his words into actions. Regarding trading strategies, our positives were both stopped by the unexpected weakness in Dollar. We will keeps our hands off this week and see whether the greenback is in genuine trend reversal, or it's just a blip.

EUR/USD Weekly Outlook

EUR/USD's rebound from 1.0339 extended higher last week. Break of 1.0652 resistance indicates bottoming. Initial bias stays mildly on the upside this week for 1.0872 resistance and possibly above. On the downside, below 1.0453 minor support will turn bias back to the downside for 1.0339 support. Break there will extend the larger down trend towards parity.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds.

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EUR/USD's rebound from 1.0339 extended higher last week. Break of 1.0652 resistance indicates bottoming. Initial bias stays mildly on the upside this week for 1.0872 resistance and possibly above. On the downside, below 1.0453 minor support will turn bias back to the downside for 1.0339 support. Break there will extend the larger down trend towards parity.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds.

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USD/JPY's fall last week confirmed topping at 118.65. Price actions from there is expected to develop into a corrective pattern. Deeper fall is expected as long as 116.86 resistance holds to 38.2% retracement of 98.97 to 118.65 at 111.13. At this point, we'd expect strong support from there to contain downside and bring rebound. Above 116.86 minor resistance will turn bias to the upside for 118.65 high. However, sustained break of 111.13 will argue that whole rise from 98.97 has completed and bring deeper fall to 61.8% retracement at 106.48 and below.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

In the long term picture, the rise from 75.56 long term bottom to 125.85 medium term top is viewed as an impulsive move. Price actions from 125.85 are seen as a corrective move which could still extend. But, up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

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GBP/USD dipped to as low as 1.2036 last week but recovered since then. Initial bias stays neutral this week first. Deeper fall is still expected as long as 1.2432 resistance holds. Below 1.2036 will target a test on 1.1946 low. Decisive break there will confirm our bearish view and resume the larger down trend. However, break of 1.2432 will suggest that consolidation pattern from 1.1946 is extending with another rise.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. Current momentum suggests that the down trend will go deeper than originally expected.

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USD/CHF dipped mildly lower last week but stayed in range of 1.0019/0342. Initial bias remains neutral this week first. As long as 1.0019 support holds, further rally is still mildly in favor. Firm break of 1.0342 will confirm up trend resumption. However, sustained break of 1.0019 will indicate near term reversal and could bring deeper fall bring to 0.9443/9548 support zone.

In the bigger picture, the corrective fall from 1.0327 should have completed at 0.9443 already. Rise from 0.9443 could be resuming the long term rally from 2011 low at 0.7065. But decisive break of 1.0327 is needed to confirm. In that case, next medium term upside target will be 38.2% retracement of 1.8305 to 0.7065 at 1.1359. Rejection from 1.0327 will extend the sideway pattern with another fall back to 0.9443/9548 support zone.

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AUD/USD's rebound from 0.7158 extended last week and the stronger than expected rise is mixing up outlook. Initial bias stays on the upside this week for 61.8% retracement of 0.7777 to 0.7518 at 0.7541. At this point, we'd expect strong resistance from 0.7777/7833 to limit upside. On the downside, below 0.7351 minor support will turn bias back to the downside for 0.7144 key support level.

In the bigger picture, AUD/USD is staying inside long term falling channel and it's likely that the down trend from 1.1079 is still in progress. Break of 0.6826 low will confirm this bearish case. We'll be looking for bottoming sign again as it approaches 0.6008 key support level. Meanwhile, sustained break of 0.7833 resistance will be a strong sign of medium term reversal.

In the longer term picture, while the down trend from 1.1079 might extend lower, we're not anticipating a break of 0.6008 (2008 low) yet. We'll look for bottoming above there to reverse the medium term trend.

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USD/CAD's fall from 1.3598 extended lower last week. The breach of 1.3080 key support level could have completed a double top pattern (1.3588, 1.3598) and indicates reversal. That is, whole corrective rise from 1.2460 is finished. Deeper decline is now expected this week as long as 1.3293 resistance holds. USD/CAD would now target a test on 1.2460 low.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is likely finished at 1.3598 too after hitting 50% retracement of 1.4689 to 1.2460 at 1.3575. Break of 1.3080 would now likely resume the fall from 1.4689 through 1.2460 to 50% retracement of 0.9406 to 1.4689 at 1.2048. We'd start to look for reversal signal below 1.2460 again to complete the correction. In case of another rise, we'll look for topping sign at 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

In the longer term picture, rise from 0.9056 (2007 low) is viewed as a long term up trend. It's taking a breath after hitting 1.4689. But such rise expected to resume later to test 1.6196 down the road.

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GBP/JPY's fall from 148.42 resumed last week and initial bias stays on the downside this week for 38.2% retracement of 122.36 to 148.42 at 138.46. Sustained trading below 138.46 will affirm the case that corrective rise from 122.36 has completed at 148.42 already. In that case, deeper fall should be seen to 61.8% retracement at 132.31 and below. On the upside, break of 142.16 support turned resistance will turn bias to the upside for 145.38 resistance and above.

In the bigger picture, price actions from 122.36 medium term bottom are seen as developing into a corrective pattern. Upside is so far limited by 38.2% retracement of 195.86 to 122.36 at 150.4 for setting the medium term range. At this point, we don't expect a break of 122.36 in near term and the corrective pattern would extend for a while.

In the longer term picture, while price actions from 122.36 would develop into a medium term correction, fall from 195.86 is still seen as resuming the down trend from 251.09 (2007 high). Hence, after the correction from 122.36 completes we'd expect another fall through 116.83 low.

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EUR/JPY dipped mildly last week but stayed in range of 120.90/124.08. Outlook is unchanged and initial bias stays neutral this week first. Further rally is still in favor as long as 120.90 support holds. Above 124.08 will target 126.09 key resistance next. As rise from 109.20 is still seen as a corrective pattern, we'd be cautious on topping around 126.09. Meanwhile, break of 120.90 will indicate short term topping and turn bias to the downside for 118.45 resistance turned support and below.

In the bigger picture, price actions from 109.20 medium term bottom are seen as part of a medium term corrective pattern from 149.76. There is prospect of another rise towards 126.09 key resistance level before completion. But even in that case, we'd expect strong resistance between 126.09 and 141.04 to limit upside, at least on first attempt. Sustained trading below 55 day EMA will pave the way to retest 109.20.

In the long term picture, current medium term decline from 149.76 is seen as part of a long term sideway pattern from 88.96. Decisive break of 126.09 will indicate that such decline is completed and EUR/JPY has started another medium term rally already.

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EUR/GBP's rebound from 0.8303 resumed last week and reached as high as 0.8766. The development suggests that fall from 0.9304 is completed at 0.8303. Rise from there is seen as the second leg of the consolidation pattern. Initial bias stays on the upside for 61.8% retracement of 0.9304 to 0.8303 at 0.8922 and above. On the downside, below 0.8646 minor support will turn bias neutral first. Break of 0.8449 support will start the third leg of the corrective pattern to 0.8303 and below.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we'd expect strong support around 55 weeks EMA (now at 0.8260) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

In the long term picture, firstly, price action from 0.9799 is seen as a long term corrective pattern and should have completed at 0.6935. Secondly, rise from 0.6935 is likely resuming up trend from 0.5680 (2000 low). Thirdly, this is supported by the impulsive structure of the rise from 0.6935 to 0.9304. Hence, after the consolidation from 0.9304 completes, we'd expect another medium term up trend to target 0.9799 high and above.

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