The U.S. dollar managed to find some strength against its counterparts on Wednesday. This has significantly affected short-term price activity across most major FX pairs. This development appears to stem from increased speculation surrounding the greenback, particularly due to anticipated economic data releases such as the FOMC report. Without further delay, let’s take a closer look at each of these major FX pairs below.
EUR/USD: Bullish
The EUR/USD market has continued its sustained upward retracement, which began in February. Currently, price action remains above the middle band of the Bollinger Bands. The corresponding candlestick for the ongoing session is green, albeit slightly contracted, indicating a struggle between bullish and bearish forces.
The Smoothed Rate of Change (SROC) indicator lines remain below the equilibrium level but exhibit a sideways trajectory. As long as the indicator stays below equilibrium, it suggests vulnerability in the market. However, the middle band of the Bollinger Bands seems to provide some support for bullish positions. Therefore, traders can still anticipate a continued upward move towards the 1.1500 level.
GBP/USD: Bullish
The GBP/USD market mirrors the behavior seen in EUR/USD, with price action trending upward and testing the upper boundary of the Bollinger Bands. After rebounding from this upper limit, the latest candlestick appears green, indicating a modest upward rebound. Additionally, the price remains above the middle band of the Bollinger Bands.
The SROC indicator also stays above the equilibrium level, albeit moving sideways, suggesting that bullish momentum still dominates. Consequently, traders may target the 1.3750 level or higher.
USD/CHF: Bearish
The USD/CHF market has been largely directionless recently, following the end of a previous downward retracement. Price action has remained sideways and currently sits below the middle band of the Bollinger Bands.
The SROC indicator line hovers just above the 0.00 level and also moves sideways. While upcoming economic indicators may influence price activity, the current technical outlook suggests the potential for a continued downward retracement toward the 0.8500 level.
USD/CAD: Bullish
Although the U.S. dollar appears to be underperforming overall, it is still holding relatively strong against the Canadian dollar. This major FX pair has posted modest gains, although the current session has seen minimal upward movement due to price contractions.
As a result, price action remains below the middle band of the Bollinger Bands. Likewise, the SROC indicator lines are below the equilibrium level but are showing an upward tilt. Despite this, the likelihood of a strong bullish continuation is limited unless the price breaks above key technical levels. Therefore, traders aiming for the 1.4000 level should proceed with caution.
AUD/USD: Bullish
The AUD/USD pair has joined other major FX pairs in recording an upward retracement, although progress has been relatively slow. Price action has remained mostly above the middle band of the Bollinger Bands. The previous session’s candle rebounded from the upper band, and the Bollinger Bands have contracted.
The most recent candle is green, keeping price action above the middle band. The SROC indicator remains above the equilibrium level and is trending sideways, suggesting continued bullish alignment toward the 0.6500 level.
EUR/JPY: Bullish
The EUR/JPY market is maintaining an upward trajectory. Although the current session’s candlestick is bearish, the price remains above a key technical support level, which supports the prospect of further gains.
The SROC indicator also remains above the equilibrium level with an upward bias, further aligning with the bullish outlook. As such, a target at the 164.00 price level remains a reasonable expectation, with potential for additional gains thereafter.
USD/JPY: Bearish
The USD/JPY pair experienced a strong rebound in the previous session. However, the ongoing session shows a slight pullback. Currently, price action remains below the middle band of the Bollinger Bands, and the latest candle is testing this middle level.
This downward pullback appears modest for now and could be negated if the upcoming FOMC data exceeds expectations. In the meantime, the SROC indicator remains above the equilibrium level, suggesting that bullish momentum may persist, with a potential upside toward the 147.00 level.
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