Analyzing the Modest Gains of the Canadian Dollar in the Wake of a Volatile Post-NFP Friday

Weekly Analysis of Major FX Pairs (December 18th – 25th, 2024)

The Greenback has taken on a more healthy appearance today. Consequently, this has been felt in most of the major FX pairs. This is happening as investors anticipate key economic data such as the Fed’s monetary policy statement. Let’s take a closer look at each of the pairs below.

Weekly Analysis of Major FX Pairs (December 18th - 25th, 2024)

EUR/USD: Bearish

The EUR/USD pair has assumed a subdued characteristic as its price action falls back below some important technical landmarks. More recently, price action has been testing a rise through the 20-day Moving Average (MA) lines. However, the recent momentum gain in the US dollar has caused the market to succumb below the 20-day MA.

Consequently, this major FX pair now trades below all the MA lines on this chart. The Stochastic Relative Strength Index (RSI) lines can be seen falling deeper into the oversold region following a bearish crossover. Therefore, this suggests that price action may approach 1.0450 ahead of the Fed’s monetary policy statement, which may provide key impetus.

Weekly Analysis of Major FX Pairs (December 18th - 25th, 2024)

GBP/USD: Bearish

The GBP/USD pair has picked up support above an important technical landmark such as the 20-day MA line. This occurred in the previous session. However, the ongoing session has appeared above the 20-day MA curve but currently appears red, which reveals the limiting effect of the US dollar on this major FX pair. Nevertheless, the Stochastic RSI lines have delivered an upside crossover above the 50 threshold level.

The mentioned indicator lines maintain an upward trajectory despite the bearish appearance of the last price candle on the chart. However, the mentioned price candle has only delivered minor price declines. Considering the fact that price action remains above the 20-day MA line and the trajectory of the RSI indicator, traders can still expect the market to progress upward toward 1.2750.

Weekly Analysis of Major FX Pairs (December 18th - 25th, 2024)

USD/CHF: Bullish

The USD/CHF has risen above the psychological price level at $0.8900. However, the market has been roughly consolidating sideways above this price level ever since. However, the price candle retains some bullishness despite the considerable downward contraction that could be seen on the last price candle on the chart.

In addition, price action remains above all the MA lines and as such suggests that the market is in a position to catch a tailwind should the monetary policy statement arrive favorably. Also, the Stochastic RSI remains above the 80 mark and therefore remains in the overbought region despite the crossover. Consequently, traders can eye the 0.9000 threshold level.

Weekly Analysis of Major FX Pairs (December 18th - 25th, 2024)

USD/CAD: Bearish

The USD/CAD has continued to see an extension of its upside-bullish correction. This major FX pair has continued its upside trend ever since its price action rebounded off the support at the 1.3444 threshold level during the second half of September. The ongoing price candle stays bullish even as price action stands above all the Moving Average (MA) lines.

The Stochastic RSI lines are also already in the overbought region, and these lines also seem to have a persistent characteristic in that region of the indicator. As a result, this market may approach the technical resistance at the 1.4400 threshold level.

AUD/USD: Bearish

AUD/USD has remained under the activity of headwinds. This has been a sustained dominance that spans most recently from the 1st of December till now. The last price candle has appeared red, confirming the dominance of headwinds in this market. Consequently, all price candles are now at a considerable distance below all the MA lines.

Additionally, the lines of the Stochastic RSI continue to descend into the oversold region and as such confirm the market’s trajectory. As a result, this major FX pair may eventually break the technical support at the 0.6300 price level should the US dollar gain more momentum.

EUR/JPY: Bullish

The EUR/JPY market is trying to stick to the recently acquired bullish trajectory. This major FX pair had rebounded off the support near the 156.00 price level. The market had progressed, rising through the 20-day MA curves, but currently struggles to rise past the 100-day MA line. However, the last price candle on this chart reveals that price action is bouncing off the floor of the drawn upside-sloping price channel.

Meanwhile, the Stochastic RSI is in the oversold region but seems to have a slight downward trajectory. Nevertheless, since price action remains above the 20-day MA and the RSI lines are still above the 80 mark, traders can stay bullish towards the 162.00 threshold level.

USD/JPY: Bearish

The USD/JPY market stays afloat above important technical landmarks. Meanwhile, price activity is finding it difficult to break the technical resistance at the 154.00 threshold level. This is displayed as recent price candles can be seen just dragging sideways at that threshold. Nevertheless, the ongoing session stays green, suggesting that upside forces are still active in this market.

The Stochastic RSI lines are in the oversold region. Also, it has delivered a crossover there, but the emerging lines seem more sideways, suggesting that upside forces are limiting bearish progress. Therefore, a favorable outcome of the Fed’s monetary policy will provide some upside thrust with which the market will rise above the 154.00 price level. Otherwise, we may see this major FX pair rebound towards the 153.00 support level.

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