The US dollar surged this week as U.S. jobless claims and retail sales data showed unexpected strength. This development has introduced some intrigue to several major FX pairs and could set the tone for the market as we approach the end of the trading week.
EUR/USD: Bearish
The EUR/USD pair has felt the impact of recent momentum in the U.S. dollar. This is largely due to a lack of significant fundamental activity from the Eurozone. Price action for this pair hit the upper limit of the Bollinger Bands and has since rebounded downward.
Despite the significant pullback, the major FX pair continues to trade above the 38.2% Fibonacci retracement level, which lies above the middle band of the Bollinger Bands. Meanwhile, the Stochastic Relative Strength Index (SRSI) lines are in the overbought region and are converging for a potential crossover. Nevertheless, price action still has a chance to continue upward toward the 1.100 mark based on current indications.
GBP/USD: Bullish
The GBP/USD pair has regained traction despite the strength in the U.S. dollar. The major FX pair rose back above the middle band of the Bollinger Bands after finding support at the 1.2800 level in today’s trading session. The SRSI indicator lines are rising steeply and heading higher into the overbought region.
The size of the price candle in the current session suggests moderate volatility. Given that the price has now surpassed the middle band of the Bollinger Bands, the upside correction can extend toward the 1.2900 mark ahead of the weekend.
USD/CHF: Bullish
The USD/CHF pair has significantly capitalized on the recent strength of the U.S. dollar. This major FX pair rebounded strongly off the lower band of the Bollinger Bands last week. After the initial momentum cooled, the market consolidated just below the 61.8% Fibonacci retracement level.
Today’s session has seen a significant price increase, bringing the market to test the middle band of the Bollinger Bands indicator. The SRSI indicator lines have resumed their upward path, now rising past the 80 mark. Observed indications suggest that the market may still approach the 0.8800 level.
USD/CAD: Bearish
In the USD/CAD daily market, price action reversed after briefly surpassing the 1.3900 level, signaling the start of a downward trend. This reversal has led to a sustained decline, with the market now trading below the middle band of the Bollinger Bands indicator, a key technical level that often acts as support or resistance.
Additionally, the Stochastic Relative Strength Index (SRSI) lines are heavily weighed down in the oversold region, indicating strong bearish momentum. This condition further diminishes the prospects of any immediate upward correction, even from the lower band of the Bollinger Bands. The continued pressure in the oversold region suggests that bearish forces are firmly in control, making a near-term recovery unlikely.
AUD/USD: Bearish
Similar to GBP/USD, the AUD/USD pair has managed to stay above a psychological support level, keeping it above the middle band of the Bollinger Bands. The last price candle on the chart suggests that price movement is moderately volatile, with the upper and lower bands of the Bollinger Bands converging.
The SRSI indicator lines remain in the overbought region while moving sideways. Observed indications suggest that price action may continue to correct upward toward the 0.6650 mark.
EUR/JPY: Bullish
The EUR/JPY pair recently experienced a significant downward correction, pushing it through multiple support levels. However, it appears that bearish momentum lost strength upon reaching the 157.73 support level, leading to an upward retracement.
This recovery has extended to the point where the price action of this major FX is now testing the middle band of the Bollinger Bands. The last price candle on the chart looks promising, while the SRSI indicator lines remain in the overbought region, with the leading line moving sideways at the 100 mark. Overall indications suggest that an extended upward correction toward the 165.00 level is possible.
USD/JPY: Bullish
The USD/JPY pair has also surged following the momentum gains in the U.S. dollar. The current session has shown a significant price increase, last seen six sessions ago, pushing the market through the 148.00 threshold. Although the pair still trades below the middle band of the Bollinger Bands, it’s clear that the market is closing in on this level.
The SRSI indicator lines remain in the overbought region and appear poised to stay there. Consequently, this gives the market a chance to rise past the 150.00 price level, potentially strengthening bullish sentiment towards the 156.00 mark.
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