The prevalent sentiment surrounding the US dollar remains the Fed’s rate cut. Investors are trying to decipher how many of these cuts the market is likely to see in the remaining half of this year. This, however, has had a significant impact on most of the major FX pairs. Let’s get into each of them below.
EUR/USD: Bearish
The weakness of the US dollar has caused the EUR/USD to rise to a 4-month high. This major FX pair now trades at levels last seen in March this year. Meanwhile, today’s trading activity has produced a minor downward correction above the 1.0900 threshold. Consequently, trading continues above the Exponential Moving Average (EMA) curve.
However, the Stochastic Relative Strength Index (SRSI) lines can be seen in the oversold region and are now trending sideways in the overbought region. Going by the look of the SRSI indicator, the market needs impetus from either side for direction. However, the position of the price action favors the continuation of an upside correction toward the 1.1000 mark.
GBP/USD: Bearish
The GBP/USD market has printed significant profits ever since its price action rebounded from the technical baseline at the 1.2300 price level. The market took off and continued on an upward path until the previous session. This major FX pair now trades at a height last seen 12 months ago. Meanwhile, the ongoing session has brought prices back below the 1.3000 threshold.
Nevertheless, trading activity continues at a significant distance above the EMA lines. Simultaneously, the SRSI lines can be seen trending slightly downwards towards the 80 threshold due to the observed downward correction. The pound side of the market seems stable on fundamentals; therefore, most of the impetus will emanate from the fundamentals about the US dollar side of the market. This will dictate if prices will descend towards the 1.2950 price level.
USD/CHF: Bearish
The USD/CHF pair has seen a strong downward correction in the previous session. The market has only presented a very minimal upside correction. It appears that the downward correction was amplified by momentum gains in the Swiss franc, sinking the major pair below all the EMA lines.
Also, the 20- and 200-day EMA lines are now crossing each other above price activity. Meanwhile, the SRSI indicator lines can be seen to have fallen deep into the oversold region. The lines of this indicator have narrowed but continue downward into the oversold region. As a result, it appears that price activity can extend towards the 0.8800 mark.
USD/CAD: Bearish
The USD/CAD market has recorded a downward correction in the ongoing session. Nevertheless, the major FX pair remains above all the EMA lines. This demonstrates that the 1.3700 price level remains a strong resistance. Meanwhile, the SRSI lines have risen through the 50 level of the indicator and have closed in on the 80 mark.
However, the leading line of the indicator can now be seen deflected to reflect the downward correction seen in the ongoing session. Be that as it may, since price action is above the EMA lines, it appears bulls still have a fighting chance and may see the market rebound upwards. Nevertheless, fundamentals from the US side of the market will play a key role in deciding if the market will re-challenge the 1.3700 resistance.
AUD/USD: Bullish
The 0.6800 price ceiling has proved to be a strong resistance level in the AUD/USD market. This has caused the market to rebound off the price level towards the technical support at the 0.6700 mark. This happened for three sessions, but the ongoing session has hinted that the support level at the 20-day EMA lines is also a strong baseline.
Also, price action remains above the EMA curves, presenting upside forces with the needed fighting chance. However, the SRSI lines seem to have dipped too deeply into the oversold region without reflecting the upside rebound seen in the ongoing session. At this point, it seems safer to go with the trend towards the 0.6800 resistance level, despite the downturn of the SRSI indicator lines.
EUR/JPY: Bearish
Market forces in the EUR/JPY are currently locked in a faceoff just above the 50-day EMA curve. This major FX pair turned tail when its price action attempted a breakthrough of the 174.70 threshold. Ever since, headwinds have gained dominance, forcing the market towards lower levels. The ongoing session has presented some resistance to further downward corrections, keeping the market above the 50-day EMA curve.
Also, the SRSI indicator lines can be seen in the oversold region and are now interwoven, hinting that upside forces are challenged. Therefore, traders will have to listen more carefully to impactful news from the JPY side of the market, as the EUR seems stable at this point on that front. This will give guidance on whether the market will rebound off the 50-day EMA lines toward the 172.00 price level.
USD/JPY: Bullish
Going by price activity in the major pairs that have the JPY as a quote, it appears that the Japanese yen has gained significant strength. This has introduced a significant downward correction to the USD/JPY pair. Meanwhile, the ongoing session has presented a halt just above the 100-day EMA lines, placing the market between the four EMA lines on this chart.
The SRSI indicator lines can be seen bouncing off the 0.00 threshold but appearing interwoven afterward while still in the oversold region. Additionally, the 20- and 50-day EMA lines appear more convergent, suggesting that downward forces may receive a boost, bringing the market lower towards the 154.00 level.
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