The US dollar started the week on a weaker note, allowing most major FX pairs to rebound in the opposite direction. The weakness was most evident on Monday, a day before the newly elected US president was sworn in. However, today’s trading activity has seen the greenback regain some traction even as the risk mood improves.
EUR/USD: Bearish
The EUR/USD pair faced rejection in today’s trading activity. As a result, the market has retraced slightly downward after price action surpassed the 20-day Moving Average (MA) line. This movement was initially driven by the pronounced weakness of the US dollar on Monday, which allowed a strong upward rebound. However, the current price candle for the ongoing session appears bearish after testing the resistance formed by the 50-day MA line.
Despite this, the Stochastic Relative Strength Index (RSI) indicator is still maintaining an upward trajectory. This upward trend in the RSI lines suggests the short-term bullish momentum remains intact. Nevertheless, the fact that price action remains below most of the MA lines indicates the potential for a decline toward the 1.0350 mark.
GBP/USD: Bearish
This major FX pair experienced moderate upward rebounds over the past two sessions. However, once price action tested the resistance formed by the 20-day MA line, a downward retracement occurred, causing the pair to retreat below this technical benchmark. Currently, GBP/USD is trading below all the MA curves on the daily chart.
The Stochastic RSI lines remain upward-sloping, now in the overbought region. However, the RSI’s exaggerated movement may signal bullish exhaustion. Combined with the fact that price action remains below all MA lines, it seems likely that the pair will resume a downward correction toward the 1.2200 price level.
USD/CHF: Bullish
Monday was the weakest trading day for most major FX pairs. In the USD/CHF daily market, price action saw a significant dip on Monday, pushing it below the 20-day MA curve. Although the previous session continued the downward trajectory, it yielded only limited movement.
In today’s trading, a rebound has been observed due to renewed momentum in the USD/CHF, resulting in modest upside recovery. Current price activity is above most MA lines on the chart, suggesting the broader uptrend may persist. If price action rises back above the 20-day MA line, the pair may move toward the 0.9200 price level.
USD/CAD: Bearish
While other major FX pairs continued their downward retracements yesterday, USD/CAD began its upward retracement. However, yesterday’s bullish gains were significantly reduced under bearish pressure. Today’s trading activity has seen substantial upside recovery, with the latest price candle testing the 20-day MA line as resistance.
This candle’s size indicates strong upward momentum. The Stochastic RSI lines have continued to reflect Monday’s downward retracement and the previous session’s contraction. Nevertheless, as the RSI lines approach a terminal level, a crossover may soon occur, signaling a possible upward push. Price action could then approach the 1.4500 level.
AUD/USD: Bullish
The AUD/USD pair experienced a strong upward rebound at the start of the week. However, this rebound has stayed below the 50-day MA curve, as yesterday’s session saw a strong price contraction. Similarly, today’s session has been constrained, keeping the pair below the 50-day MA line and the 0.6300 level.
Despite limited movement over the last two sessions, the Stochastic RSI lines remain upward-sloping, even as they sit in the oversold region. However, the market is more likely to resume its downward retracement if significant economic developments arise from the US. Traders may target the 0.6250 price level.
EUR/JPY: Bullish
The EUR/JPY market has shown impressive performance since last week, rebounding strongly after testing the 160.00 price level. Price action has continued to climb, breaking through the 162.00 resistance level today. This market now trades above the 20-, 50-, and 100-day MA lines.
The Stochastic RSI lines remain upward-sloping, entering the overbought region. However, the RSI lines are not overextended, signaling that the bullish momentum is stable. Traders can anticipate a potential retracement toward the 165.00 level soon.
USD/JPY: Bullish
The USD/JPY market experienced a strong upward retracement today, bringing the pair above the psychological price level of 156.00. The pair now trades above the 50-, 100-, and 200-day MA lines. The latest price candle reflects a level last seen five sessions ago.
The Stochastic RSI lines are gradually moving upward from the oversold region. This indicates the market may head toward the 20-day MA and the 158.00 price level. As such, targeting these levels could yield favorable outcomes for traders.
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