The US dollar has delivered a range of positive data so far, including the ADP report on employment changes, GDP, and PCE. However, while some metrics have exceeded expectations, others have fallen short, presenting a mixed outlook for most of the major FX pairs. Let us examine each of these markets one by one in more detail below.
EUR/USD: Bullish
The EUR/USD market has continued to rise after bouncing off the support level at the 1.0784 price level. This major FX pair has advanced through the 50% Fibonacci Retracement level with significant momentum initially, but it has now contracted to trade just above this retracement level. This development is reasonable as the price action remains below all the Moving Average (MA) lines. Nevertheless, the session still records gains in the green.
While price movement has been modest, the Stochastic Relative Strength Index (Stochastic RSI) lines have risen significantly into the overbought region. The position of price activity in this major FX pair suggests a potential risk for upside retracements, which indicates that the market may still fall back through the 1.0784 support level.
GBP/USD: Bullish
The GBP/USD pair has experienced a moderate upside retracement from the support level at 1.2907. However, it has also witnessed a moderate downward retracement today. This downward movement implies that the market may retreat below the 100-day MA line. Despite the downward retracement, the Stochastic RSI lines continue to reject downward movement and are now pointing upwards, with the leading line of this indicator crossing the 80 mark.
The appearance of the latest price candle on this chart places traders in a state of indecision. Nevertheless, they may still consider the likelihood of a continued upward retracement through the 1.3000 resistance level, disregarding the current activity of the 20- and 50-day MA lines.
USD/CHF: Bearish
Although the ongoing session in the USD/CHF market has seen considerable contraction, sentiment surrounding the US dollar still favors the major FX pair for continued upside corrections. Price activity in this market has bounced off the support level at the 0.8400 price mark, and the market has experienced notable price movement since.
Recent price action suggests that the market may gradually enter a consolidation phase, with price activity remaining below the 100- and 200-day MA lines. Additionally, the Stochastic RSI lines are beginning to decline below the 80 mark of the indicator. While the market appears likely to fall towards the lower support levels at 0.8650 and 0.8600, traders should remain vigilant for relevant economic developments.
USD/CAD: Bullish
The USD/CAD market has maintained its upward correction through a two-month resistance level. This upward correction began after a recent rebound near the 1.3400 support level. Although the bullish momentum has shown slight signs of weakening, the positioning of the MA lines below the price action suggests that the upside momentum may regain strength.
The 50- and 200-day MA lines are nearing a crossover, while the 20- and 100-day MA lines have already completed an upside crossover. Simultaneously, the Stochastic RSI lines appear ready to rise into the overbought region, which may enable this major FX pair to approach the 1.3950 level or even reach 1.4000.
AUD/USD: Bullish
The AUD/USD market has been experiencing a gradual decline to lower price levels after peaking just above the 0.6900 price level. The market has been on a downward trajectory since then, with attempts to reverse these declines failing to hold. Today’s trading activity shows yet another attempt to counter the downtrend, although the positioning of the MA lines suggests that recent gains may soon be reversed.
The 20- and 100-day MA lines are delivering a crossover after the 20- and 50-day MA lines previously completed a crossover above the current price action. Despite this, the Stochastic RSI lines have shown an upside crossover deep within the oversold region, indicating that the downward retracement may extend toward the 0.6500 price level as the indicators currently favor a bearish direction.
EUR/JPY: Bearish
The EUR/JPY market has observed price activity moving beyond the Moving Average (MA) line on the daily chart. Recently, a bullish crossover has occurred, with the 20- and 50-day MAs crossing beneath the current price level. Moreover, the 100- and 200-day Exponential Moving Averages (EMAs) have converged, signaling another crossover beneath the current price. Reviewing the last two candles, there seems to be a standoff between buyers and sellers, resulting in a spinning top candle pattern.
Meanwhile, the Stochastic Relative Strength Index (Stochastic RSI) continues to trend upward, having narrowly avoided a bearish crossover slightly above the 80 level. Given that price action remains above the MA lines, traders may maintain a bullish stance. Therefore, price action may potentially rise toward the 166.00 level and could even reach around 166.50, providing short-term profit opportunities.
USD/JPY: Bullish
The USD/JPY pair has shown a strong bullish trend for an extended period. However, the slightly lower-than-expected US GDP has had a noticeable effect on price action. The most recent price candle on the chart is positioned above all the MA lines. Furthermore, the MA lines themselves appear to be approaching another crossover beneath the price activity of this FX pair, despite the bearish appearance of the candle.
Additionally, the Stochastic RSI lines maintain an upward trajectory and have already surpassed the 70 mark. Technical signals from indicators suggest that price action may resume its upward correction through the 154.00 level and possibly toward the 155.00 price level.
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