The U.S. trade tariff continues to afflict the U.S. dollar, as countries continue to take countermeasures. This keeps many of the major FX pairs in the green as they capitalize on the dollar’s weakness to price in significant upside recovery. While the gaining pairs may see minimal retracement, let’s examine what may be expected from each of them.
EUR/USD: Bullish
The EUR/USD has seen a massive upward retracement over the past sessions. The upside movement was so intense that price activity quickly rose through multiple resistance levels, including those formed by the Moving Average (MA) lines. However, over the past three sessions, price action has been retracing to lower price levels, albeit with reduced momentum.
Consequently, trading in this market remains above all the MA lines. The ongoing session, however, has appeared green despite being contracted. In addition, the Stochastic Relative Strength Index (RSI) lines are still above the 80 mark, though they are currently falling toward that level. Be that as it may, traders can still aim for the 1.1000 price level.
GBP/USD: Bullish
The GBP/USD market has behaved similarly to EUR/USD. Price action has risen considerably, and as a result, the major FX pair currently trades above all the MA lines. However, the market has retraced minimally downward. Nevertheless, price action remains above all the MA lines.
Likewise, the Stochastic RSI lines can be seen moving sideways near the 100 mark. Since price action stays above all the MA lines, it could be said that upside forces are favored. Therefore, traders can still anticipate an upside retracement toward the 1.3000 price level.
USD/CHF: Bearish
The USD/CHF market hasn’t capitalized much on the dollar’s weakness. However, this has allowed the major FX pair to break out of its short-term consolidation around the 0.8800 price level. The ongoing session is green and stands above the 200-day MA line.
As a result, the Stochastic RSI lines can be seen rising steadily from the oversold region. However, based on price action on the daily chart and the position of the Stochastic RSI lines, the market still appears to be in a vulnerable state. Therefore, upside targets are best kept below the crossover between the 20-day and 100-day MA lines, perhaps at the 0.8900 price level for now.
USD/CAD: Bearish
Although the U.S. dollar is currently under pressure, it appears strong enough to withstand downward forces from the Canadian dollar. The price candle corresponding to the ongoing session has appeared red. Nonetheless, price action remains above the convergence of the 20-day and 50-day MA lines. Technically, this suggests that upside forces may soon push the market higher.
On the contrary, the Stochastic RSI lines are falling toward the oversold region, with the lines moving closely together. Therefore, traders should keep an eye on fundamentals that may drive further downward retracement toward the 1.4413 price level. Otherwise, a breach of the 1.4500 price level could be anticipated.
AUD/USD: Bullish
The AUD/USD pair has been on a slight upward trend ever since rebounding from the support near the 0.6100 price level. More recently, price candles in this market have been positioned between the 20-day and 50-day MA lines. However, the ongoing session is in the green, suggesting that price action may soon surpass these moving averages.
Supporting this outlook is the movement of the Stochastic RSI lines, which are retracing to higher levels following a crossover at the 50 mark. By implication, traders can still target a retracement toward the 0.6400 price level.
EUR/JPY: Bullish
The EUR/JPY market is once again trading above the 160.00 price level. The support at 156.00 held strong, and following a second retest of this level, the market rebounded significantly. Consequently, price action has resurfaced above the 100-day MA line, with the 200-day MA line still ahead.
The Stochastic RSI lines are currently trending sideways. Nevertheless, the latest price candle remains green and moderate in size, indicating that bullish forces remain strong at the moment. However, traders should monitor economic indicators that may trigger a trend reversal from its current path toward the 163.00 price level.
USD/JPY: Bearish
The U.S. dollar has managed to gain some strength against the Japanese yen. As a result, the USD/JPY market has printed moderate gains in today’s trading session. However, the ongoing session appears to have rebounded significantly. The Stochastic RSI lines are also rising into the overbought region.
However, the movement of the indicator lines seems too rapid compared to price movement, as the market has only experienced moderate gains. Given that price action is still below all the MA lines, vulnerability remains, suggesting the possibility of continued downward retracement toward the 145.00 price level.
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