This week, the mood surrounding the US dollar seems to have improved. However, this has caused the major FX pairs to change their market directions. Some pairs are fighting the created headwind, while others have succumbed to it. Let’s take a more critical look at things.
EURUSD: Bullish
From last week until now, the Major Pair EURUSD has broken through resistance at 1.1000, 1.1100, and 1.1200 to now reach the 1.1218 price mark. This shows that the market has stayed bullish ever since last week. Nevertheless, it appears that the market mood has changed recently. Consequently, this pair seems to have started consolidating, as price action is moving in nearly a straight line.
Also, the lines of the Stochastic Relative Strength Index (RSI) can be seen merged together and moving slightly sideways to indicate that the market is consolidating. If buyers are able to sustain above the 9- and 21-day MA lines until the fundamentals surrounding the US dollar change, then the EURUSD may extend its upside move towards the 1.1300 mark.
GBPUSD: Bearish
The GBPUSD faced a downside rejection recently when its price ventured close to the 1.3100 price mark. This major pair seems to have run out of steam and may extend its downward correction below its base at the 9-day MA line. Additionally, the upside momentum in this market appears to have died out as the RSI indicator line keeps falling towards level 60 of the indicator.
However, it should be noted that the pace of the downward trend of the RSI lines isn’t too rapid or slow, which suggests that price action in this market may find support above the 21-day MA line. Consequently, this may return the pair to its upside. Nevertheless, traders can anticipate a downward correction towards the 1.2850 mark.
USDCHF: Bearish
The USDCHF pair has continued to remain bearish as its price action continues to fall towards supports. It appears that the CHF is Strengthening against the dollar. Consequently, this has caused the pair to keep trending downward, even when the US dollar seems to be improving. Price action in this market has remained below the two MA lines.
Also, the RSI indicator has just delivered a bearish crossover in the oversold region. Consequently, this suggests that price action may offer more profits to bear traders as trading activities continue for the week. Therefore, traders can hope for the retracement to extend towards the 0.8480 mark.
USDCAD: Bearish
The USCAD mark is only holding on to past glory. This major pair recorded a significant upside rebound during last week’s trading. This week’s trading hasn’t brought so much of a gain to the pair, as price action continues to trickle down towards lower support. Nevertheless, this pair is still holding on to the majority of the profits from last week.
Consequently, this seems to have been restraining the RSI lines from rapidly progressing into the oversold region following a downward crossover. Red price candles can be seen appearing below the MA lines; therefore, traders can expect the price trend to continue towards the 1.3100 mark.
AUDUSD: Bearish
The AUDUSD price action can be seen trying to wrestle with the effect of the improving mood surrounding the US dollar. Here, price action had started to correct downwards after it tested the 0.6000 price resistance level. Upside progress had deteriorated until now, as a green price candle showed up near the 9-day MA line on this chart.
This is revealing that the tailwind is mounting resistance to the downward retracement. Meanwhile, the RSI is also revealing that a tailwind may be preparing to change the market direction, as an upside crossover seems to be developing. Traders can wait for the price to bounce towards the 0.6850 mark.
EURJPY: Bearish
On the EURJPY daily market, it has been possible to observe that price action has moved above the 9-day Moving Average (MA) line over the last three sessions. However, a headwind became active as trading activity drew closer to the 21-day MA line. As a result, price movement corrects in the direction of the 9-day MA line, which serves as support.
The Stochastic Relative Strength Index (RSI) lines are still moving in a slightly higher direction, approaching the indicator’s 50 level. This implies that price activity may continue to move in an upward direction. Traders might still wish for the upward retracement to go farther, possibly reaching the 157.00 level.
USDJPY: Bearish
This major pair is preparing to return to its upside path, and the improving mood of the US dollar seems to have been offering some assistance to this ambition. About four sessions ago, price movement bounced off upwards from around 137.00. However, further progress from this point on has been difficult, and the ongoing session seems to have been better considering the size of the last price candle compared to the previous ones.
Also, the RSI lines here seem to have aborted a downward crossover, and their lines are now trending upwards. If the USD can hold it together, price action in this market may surpass the 139.20 mark. Consequently, this will offer more confidence to buyers and may send prices towards the 141.00 mark.
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