With the new year in full swing, the US dollar has resumed its bullishness. This has effectively set a new tone for most of the major FX pairs, as most of them have changed course from that of the past few days due to dollar weakness. Without further ado, let’s take a look at each of the major FX pairs below.
EUR/USD: Bearish
With the favorable arrival of the ISM services PMI, the USD has regained bullish momentum. This has returned the EUR/USD to its straight bearish path. The major FX pair has retracted back below the 20-day Moving Average (MA) line, therefore below all the MA lines on the chart. Meanwhile, price action has been proceeding south for two straight sessions. On the contrary, the Stochastic Relative Strength Index (RSI) lines stay projected upward, almost reaching the 80 mark.
However, the lead line of the indicator seems a bit deflected and as such seems tilted toward a trend reversal move. In addition, the behavior of the Stochastic RSI lines suggests that headwinds are strong since prices are falling significantly while the RSI lines aren’t moving too exaggeratedly. Therefore, traders can brace for impact at the 1.0200 price level.
GBP/USD: Bearish
This major FX pair has fallen back under the control of downward forces. The GBP/USD market had earlier attempted a recovery above the 20-day MA line. However, the previous session had recorded a downward rebound off the 20-day MA line at the arrival of favorable fundamentals for the US dollar. Furthermore, the ongoing session has recorded a steeper downward retracement with the corresponding price candle plunging the market below the 1.2400 threshold level.
Also, this major FX pair has fallen back below all the MA lines on the chart. However, the Stochastic RSI lines still have a general upward trajectory with just a deflection on the lead line of the indicator. This seems to point out that downward forces may have a strong backing. Therefore, it seems traders should prepare to see price action hit the 1.2250 price level soon.
USD/CHF: Bullish
The USD/CHF is returning to its winning ways as price action rebounded strongly upward above the 0.9000 price level. The last price candle on the chart keeps the major FX pair trading above the psychological price level at the 0.9100 mark. The mentioned price candle has an upper shadow, which reflects the fact that downward forces are active in the session.
Nevertheless, price action stays above all the MA lines, and bulls stay ahead in the session. On the contrary, the Stochastic RSI indicator lines still have an overall downward trajectory with a deflection on the lead line. This hints that the upside force may still have significant steam to propel the market further upward. Consequently, traders can eye the 0.9150 or 0.9200 price level as a target.
USD/CAD: Bullish
The USD/CAD market has also regained bullish traction since the previous session. This has brought some upside recovery to the major FX pair following a dip below medium-term support at the 1.4342 price level. The ongoing session has it that buyers are still in the lead as price action rebounded off the 20-day MA line as a support level.
The Stochastic RSI lines are still in the oversold region and have no deflection despite the seen upside recovery. Nevertheless, the position of price activity above all the MA lines remains a strong indication that this market is heading upwards. As a result, we may see the market even breaching the 1.4500 price level.
AUD/USD: Bearish
Similar to what has been seen in the previously examined bearish major FX pairs, the AUD/USD has also rebounded off the 20-day MA line as a resistance. A downward retracement has resulted as prices head south and have been on that path for two sessions on the daily chart. Technically, this has returned price action to a bearish path since the major FX pair now resumed trading below all the available MA lines on the chart.
Meanwhile, the Stochastic RSI lines are still in the overbought region around the 80 mark of the indicator. The lead line of the indicator is actually deflected in recognition of the downward retracement. Albeit, price action seems prepared to fall through the 0.6200 and toward the 0.6100 price level.
EUR/JPY: Bullish
EUR/JPY has recovered upward off the 100-day MA line as a support level. This major FX pair experienced a strong upward retracement in the past two sessions on the daily chart. However, the previous session could not sustain the upward retracement, and as a result, the market rebounded off the 200-day MA line. Price activity in this market then retreated below the 164.00 price level.
The ongoing session has continued on the same path but seems to keep the market above the converging lines of the 20- and 50-day MA lines. Meanwhile, the Stochastic RSI lines are also projected upwards. The convergence of the MA lines and the trajectory of the RSI indicator suggest that the market will most likely rebound upwards through the 164.00 support level.
USD/JPY: Bullish
This major FX pair has continued its upside correction. This opinion stems from the fact that price action has just, as of today’s trading session, broken through another technical resistance level. The last price candle now sits, keeping the pair trading above the 158.00 price level. Also, this has placed the pair trading above all the MA lines, which indicates that the market is in an uptrend.
Similarly, the Stochastic RSI indicator has just displayed an upside crossover above the 50 level of the indicator. The emerging lines of the indicator aren’t moving exaggeratedly but have an upward trajectory. Therefore, indications arising from this market align to suggest that this market may approach the 160.00 price mark subsequently.
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