The Greenback has bounced back, introducing a shift in the trend of most major FX pairs. The recovery of the US dollar seems to stem from speculation that the US economy may outperform many other major economies.
EUR/USD: Bearish
Price movement in the EUR/USD market rebounded strongly off the resistance at the 1.1200 price level. The market had earlier attained a multi-month high during the downturn of the USD as investors speculated over upcoming rate cuts. Today’s trading activity was significantly bearish, considering the volatility of price movements.
Yet, trading activity remains above the middle limit of the Bollinger Bands. Meanwhile, the Stochastic Relative Strength Index (Stochastic RSI) lines continue to indicate that downward forces are in the lead. Technically, this hints that price action may bring the market to the baseline at the 1.1059 mark.
GBP/USD: Bearish
The GBP/USD market has only felt the impact of the improving mood of the US dollar in the ongoing session. Price action has pushed the Bollinger Bands (BB) indicator envelope without much of a reaction. However, the ongoing session has produced the expected rebound. Nevertheless, trading is still occurring above the middle limit of the BB indicator.
Additionally, the Stochastic RSI indicator lines have taken a downward trajectory, indicating a growth in bearish momentum. Ahead of the BoE Mann speech, traders can aim for the 1.3150 price level, and possibly lower in subsequent sessions.
USD/CHF: Bullish
The USD/CHF market has been on a long-term downtrend, which started on May 1st. The market has been making lower lows ever since, with intensity increasing more recently as volatility increased. Meanwhile, today’s trading has presented a moderate upside rebound, which still seems overwhelming. The upside rebound occurred off a support level last reached in early January.
The Stochastic RSI indicator has revealed that the downward effect is still very pronounced. However, this major FX pair may still present some short-term gains ahead of the Fed’s rate cut coming up in September. In the meantime, traders can aim at the 0.8500 mark and levels slightly above this mark.
USD/CAD: Bullish
Price action in the USD/CAD daily market has similar characteristics to the other major FX pairs examined above, except that its price action has only rebounded off the support last seen five months ago. This has kept the market hugging the lowest limit of the BB indicator, causing the BB indicator itself to trend downward.
Additionally, an upside crossover has been initiated on the Stochastic RSI indicator lines, hinting that traders may see short-term gains while the improving mood of the USD lasts. Therefore, traders can aim for the 1.3500 price level and potentially higher, depending on supportive fundamentals from either side of the market.
AUD/USD: Bullish
The AUD/USD is one of the major FX pairs that have been negatively impacted by the strengthening US dollar. This market has also rebounded off the price level last touched on January 1st, 2024. The market only found support above the 0.6700 price level three sessions ago.
The ongoing session has delivered a moderate downward retracement, but trading continues above the middle limit of the BB indicator. The Stochastic RSI indicator lines have taken a downward trajectory following a bearish crossover in the overbought region. Therefore, traders can target support levels above the 0.6700 price level in the meantime.
EUR/JPY: Bearish
After signals from the ECB about potential interest rate cuts, investors in the EUR/JPY market have taken a more cautious approach. This caution has dampened any recent upward momentum and shifted the market’s focus toward lower price levels. In the current session, the price of the pair has dropped below the middle band of the Bollinger Bands (BB) indicator.
The body of the present price candle remains close to the opening level, suggesting active downward pressure. Furthermore, the Stochastic RSI lines have started to slope downward, pointing to a bearish price retracement. As a result, traders might target lower price levels around the 160.00 and 159.00 marks.
USD/JPY: Bullish
Price movements in the USD/JPY market have also rebounded off the support level at 144.93 as the USD strengthens. The ongoing session has been able to recover from the price dip seen in the previous session. The BB indicator suggests that this market may experience a stronger price move as its upper and lower bands are contracting.
Similarly, the Stochastic RSI indicator lines still show a downward trajectory but may deflect off the leading line of the indicator. If the upside retracement increases, a trend reversal may be initiated on the Stochastic RSI lines, hinting at growing bullish momentum. Consequently, traders may aim for the 147.50 mark in the meantime.
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