The US Consumer Price Index (CPI) data has been released, influencing market expectations regarding potential rate cuts by the Federal Reserve. The CPI data has reduced the likelihood of a significant rate cut by the Fed. Traders are also closely monitoring the Fed minutes for further insights, and this has had a noticeable impact on most of the major FX pairs.
EUR/USD: Bearish
The EUR/USD has experienced a downward retracement, likely driven by market anticipation. Despite this, the pair has managed to rise past the technical resistance at the 1.1100 mark. The market continues to hover around the upper limit of the Bollinger Bands (BB) indicator.
Similarly, the Stochastic Relative Strength Index (Stochastic RSI) is in the overbought region, though the leading line is hinting at a potential crossover due to the ongoing retracement. Both the euro and the US dollar are influenced by strong fundamentals today, and traders might expect the 1.1100 support level to hold.
GBP/USD: Bearish
GBP/USD has pulled back below the upper limit of the BB indicator after previously breaching it. The major FX pair reacted with a slight downward movement, but the ongoing session has seen minimal bearish pressure.
Nevertheless, the pair continues to trade well above the middle limit of the BB indicator. The Stochastic RSI has reached the overbought region and has converged for a bearish crossover, increasing the likelihood of the price testing the 1.3000 support level.
USD/CHF: Bearish
The USD/CHF pair has resumed its downward trend after attempting to rise above the middle band of the BB indicator in the past three sessions. The downward retracement has been significant and rapid. However, the ongoing session shows a slight pause in the correction.
The fact that the price is now below the middle limit of the BB indicator casts a bearish outlook on this market. Similarly, the Stochastic RSI is heading downward toward the 50 mark, signaling that the price may soon test the technical support at the 0.8500 mark if the Fed minutes do not provide a boost to the USD.
USD/CAD: Bearish
USD/CAD has been trading within a sideways channel on the chart, but the downward retracement has intensified, causing the pair to hug the lower limit of the BB indicator. The Stochastic RSI remains in the oversold region as bearish momentum continues to weigh on the market.
However, it appears that this momentum is starting to decline as the major FX pair approaches the 1.3595 support level. This suggests that the support may hold, and traders might anticipate a rebound from this level.
AUD/USD: Bullish
The AUD/USD market has maintained its upward trajectory, although upside momentum appears to be gradually slowing, as seen in the recent price candles. The major FX pair is still trading above the upper limit of the BB indicator, indicating that bullish momentum remains intact despite the slowdown.
The Stochastic RSI is still projected upward in the overbought region, with the leading line beginning to deflect toward the lagging one. Therefore, traders might anticipate a potential reversal toward the 0.6700 support level.
EUR/JPY: Bearish
Over the past two sessions, the EUR/JPY market has continued to retrace to lower levels after encountering resistance at the 165.00 mark. This has pushed the market back below the middle band of the BB indicator. Similarly, the Stochastic RSI lines are trending downward toward the 80 mark, indicating that the price may continue to decline.
However, the ongoing session has seen the price challenge the middle limit of the BB by recovering some of the previous losses. Despite this, the market remains vulnerable, and traders might wait for the price to find support above the 162.00 level before targeting higher levels above the 164.00 threshold.
USD/JPY: Bullish
The USD/JPY market exhibits similar behavior to the major FX pair (EURJPY) examined above. The key difference is the distance between the current session and the middle limit of the BB indicator.
The gains in the ongoing session have occurred off the support at the 145.00 level. Despite this, the Stochastic RSI is trending steadily downward toward the 70 mark, suggesting that the price action may revisit the previously tested support at the 144.93 level.
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