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The pair broke the recent highs and closed the day at 1.1635, highest in months. This is a major resistance and the conditions for a correction are building. After so many days of a strong rally, the price must finally give. The support is now moved to 1.15. It a good buy area with target at the new highs.

Big day tomorrow for EURUSD. Draghi will neither confirm the change in the policy or he will disappoint and back down. The latter is more likely as ECB is not ready to do anything drastic given weak inflation in the Eurozone.

U.S. data continues to disappoint, which is not helping at all. The price must be assumed bearish. The next major support is at 92.50 and the DXY is capped under 95.00. Only the break of that resistance would suggest any further move up – unlikely given the fundamentals.

Dollar index seems to be a victim of positive tone from BOC, BOE, ECB and dismal US spending and inflation. Despite Yellen’s hikes, US Dollar has been collapsing steadily since Dec 2016. Nothing suggests the current downtrend is near the end.

God! Aussie was on fire today together with Kiwi. The Chinese trade balance showed better than expected figures but the reaction in the market was astonishing. AUDUSD rallied almost 100 pips and reached the resistance at 0.7750

Testimony was less hawkish then the market expected. September hikes are off the table and the inflation is still a concern Yellen said. FED is facing either further hikes or reduction in the balance sheet. Can’t have two so I think Yellen is playing down the hikes as she wants to tackle 3 trillion balance sheet this year

Interesting development in USDJPY. As we pointed out, the pair reached a major resistance zone at 114.50. This level responded well in the past and the price did not bridge it. It is very likely that this is the case this time too.

USDJPY had another good session. The pair traded as high as 114.30 and closed the day at 114.00. There is a major resistance at 114.50. This level had proven to be a pivotal zone in the past and it is likely to respond to selling once again. Weekly momentum is fully overbought and it supports lower prices.

As expected EURUSD found a bid at around 1.1315 and advanced towards 1.1420. The price was driven mainly by disappointed ADP number, which is normally a good predictor of tomorrow’s NFP. ADP printed 158K, apart from January, this is the lowest read this year yet.

Index had rebounded from the lows at 95 and traded as high as 96.20. It is possible that DXY will climb a bit higher and take out the resistance at 96.40