Razvan Mihai, CFTe
Forex Rally
EURUSD - Continued the downtrend
Last week my expectations were for the EURUSD was to break under 1.0600 and move down to 1.05. The price broke below the support level, but bears did not have the power to push the price to the next round number. The drop stopped pretty fast and the price bounced back to 1.0700. After retesting the resistance it dropped again to retest the lows.
EURUSD is now trading around 1.0560 and it seems that bears are ready to push this pair lower. I am still expecting the price to drop to 1.0500, maybe in the beginning of this week. In the bigger picture, the RSI is still showing a divergence. This combined with the Falling Wedge might end up being a strong bullish signal. A break and close above the upper line of the wedge would be a strong buy signal for bulls, and the price might rally back towards 1.07.
USDJPY - Sideways move
The USD lost against the Japanese Yen last week.The price dropped under the local support from 122.70 and retested twice the key level from 122.24 without breaking below it. After the second retest the price bounced back above 123.00.
From the 6th of November to now, USDJPY has been trading in a sideways move limited by 123.60, the upper limit, and 122.24, the lower limit. This means that the greenback just took a short break from appreciating against the Yen. A break above the resistance could trigger another strong jump for the US Dollar. An alternative scenario may come into place if the bulls will rather wait for the Fed to make a move in December. A break below the support could trigger a bigger corrective move for the existing trend.
NZDUSD - Symmetrical Triangle
Last Monday, the price of NZDUSD retested 1.6500, which happened to be also 61.8 Fibonacci retrace of the latest swing high. From the level the price was pushed towards the latest high, but it did not reach it. Throughout the week the price moved sideways, hitting lower highs and higher lows, drawing a Symmetrical Triangle.
The Symmetrical triangle is considered to be a continuation pattern. But this situation is a bit different. The US dollar is gaining across the board, which means that it might win also against currencies like NZD and AUD. A break below the lower line of the triangle would signal adrop back towards the current lows of the downtrend, while a break above the upper line of the pattern would signal a continuation of the rally that the New Zealand dollar started.
USDCAD - Continuing the Uptrend
Most investors prefer to buy the US Dollar, for the reasons we all know. Better economic outlook and the Fed promise to hike the interest rate made everyone go for the greenback. USDCAD has been trading in an uptrend for some time now. Price action is still bullish, showing eagerness to reach an older high at 1.3455
Even though the price continued to hit new higher highs and new higher lows, the RSI is drawing a stronger divergence. With each new swing high on the price movement, the RSI is drawing a new swing low. This might just prove to be a strong bearish signal for the USD. For this signal to be confirmed, the price will have to break below the trend line.
Risk Warning: Financial Derivative Instruments are complex instruments and leveraged products that involve a high level of risk which can result in high losses, including the risk of losing the entire capital invested by the Client. Such instruments might not be suitable for all Clients. The Client should not engage in transactions with such Financial Instruments unless he/she understands and accepts the risks involved by trading Financial Instruments, taking into account his/her investment objectives and level of experience. Forex Rally warns that the information published on this website shall not be considered as a recommendation to buy/sell/keep a certain financial instrument and that past performance of Financial Instruments is not a reliable indicator of future performances.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.