The US dollar has experienced a change in its price trajectory after the greenback witnessed a wave of improving fundamentals. This occurred following the release of the US PCE and GDP data, both of which showed signs of improvement. This influenced most major FX pairs, causing the market to reverse in a positive direction for some and negative for others.
EUR/USD: Bearish
The moderate recovery in the USD has had a noticeable effect on EUR/USD. This major FX pair spent most of the previous week attempting to break the resistance at the 1.12100 level. However, this caused the market to oscillate rapidly just below that resistance. During Friday’s session, the market printed a downward retracement due to the momentum gained by the US dollar.
Nevertheless, trading remains above the middle band of the Bollinger Bands (BB) indicator. Additionally, the retracement hasn’t erased all the gains recorded on Thursday. The Stochastic Relative Strength Index (Stochastic RSI) lines are on a downward trajectory, but the market’s position hints that an upward retracement may continue, potentially breaking through the 1.12100 threshold.
GBP/USD: Bearish
The broader outlook for GBP/USD remains bullish. However, the latest price candle only reflects short-term market behavior due to the slight momentum gained by the USD. The previous week ended in the red but didn’t completely erase Thursday’s gains.
Technically, this keeps the market near the upper limit of the BB indicator. The BB indicator continues to expand as volatility remains moderately high. Meanwhile, the Stochastic RSI is on a downward trajectory, suggesting that the market could move lower, though this depends on short-term fundamentals.
USD/CHF: Bearish
USD/CHF continues to oscillate around a multi-month support level. Headwinds gained significant control over the market on Thursday, and Friday’s session solidified the bears’ dominance. The price of this major FX pair is trapped below the 78.60% Fibonacci retracement level. Similarly, the Stochastic RSI is trending downward toward the 50 mark.
Technically, this suggests that price action may break the multi-month support level, given the Stochastic RSI and the latest price candle. Traders should prepare for potential movement toward the 0.8340 mark.
USD/CAD: Bullish
USD/CAD has bounced back after price action tested support at the 1.3444 level. This major FX pair ended the week in the green, even though price action remains below the middle band of the BB indicator. The Stochastic RSI is rising after a bullish crossover below the 50 mark.
The last price candle and the Stochastic RSI’s trajectory suggest that price action may continue upward. If this happens and price action rises through the middle band of the Bollinger Bands, the market may break through the 1.3600 level.
AUD/USD: Bullish
AUD/USD has remained in the green but not without facing significant resistance. The last price candle from Friday’s session suggests that the market came under heavy pressure, indicated by the contraction of the candle. Although the market is still above the middle band of the Bollinger Bands, the Stochastic RSI is already trending downward.
While this should be taken into account, it mainly hints that upward momentum may weaken if the US dollar continues to gain strength. Traders targeting the 0.6950 level should exercise caution and stay updated on key fundamentals.
EUR/JPY: Bearish
EUR/JPY saw a steady price increase in previous sessions, following a rebound from the 140.00 support level. However, Friday’s trading activity brought the market back below a crucial level. The pair seems to have adopted a bearish outlook due to the strengthening US dollar.
The latest price candle has brought the pair below the middle band of the Bollinger Bands, sharply erasing gains from the past six sessions. The Stochastic RSI has delivered a bearish crossover, with its lines falling toward the 80 level, suggesting that the pair may drop back toward the 140.00 threshold.
USD/JPY: Bearish
USD/JPY maintains a strong correlation with EUR/JPY, despite the USD gaining some momentum. This indicates that the Japanese yen has stronger fundamental support. As a result, the pair has plunged sharply downward and now trades below the middle band of the BB indicator. The Stochastic RSI is on a downward trajectory toward the 80 level. Given the movement of the Stochastic RSI and the size of the latest price candle, it appears that downward forces are currently in control. Bearish traders may target the 140.156 level.
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