by JustForex
Trading on Monday was calmer than on Friday. The euro showed a gradual decline against the dollar in light of positive data from the US ISM. At the same time, the dollar index almost reached the SMA 100 moving average on the daily chart. From a technical point of view, this is a defining moment for the market. Further strengthening of the dollar and its consolidation above the moving average may indicate a change in the direction of the foreign exchange market in the long term.
The main scenario for trading EUR/USD is selling. Friday’s bearish momentum continued on Monday. The ADX is growing on the decline, which indicates the presence of significant bearish pressure. But amid a slowdown of the fall, convergence has formed on the MACD, which may indicate a temporary halt or pullback.
Alternative scenario: if the price manages to gain a foothold above the level of 1.2123, the pair may return to growth up to 1.2179.
On Monday, the bulls were unable to take over. The intraday growth was completely erased in the American session. The profitability of the British Gilts showed the first significant decline in the last five days. Although the pair closed with only slight losses, it left a long shadow at the top, which indicated the prevalence of bearish influence.
The main scenario for trading GBP/USD is selling. After the pullback on Monday, the decline was resumed with consolidation below the first support level. However, the ADX is hardly responsive. On the MACD, in the event of another rollback, a divergence may form. As a result, a decline is expected, but the trend may be slower.
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Alternative scenario: if the pair consolidates above 1.3997, it may resume its growth.
The dollar-yen pair continues to grow steadily following the dollar index. At the same time, the pair has received additional support from the stock market, where positive trends are observed. Although the slowdown in growth is easy to notice, there are no signs of a reversal so far.
The main scenario is trading in a sideways range between 106.94 – 106.31. In the short term, the pair may stop or go for a correction, as divergence has formed on the MACD, and the ADX has fallen. But it is too soon to talk about selling. The H4 and D1 timeframes indicate growth over the medium term.
The alternative scenario implies the price-fixing below 106.30. In this case, the pair may return to decline to 105.50. A breakout of 106.94 could indicate further gains.
On Monday, there was a pullback after Friday’s strong north impulse. But it is too soon to talk about further decline. The oil market suddenly went down, allowing the pair to grow in the Asian session. The H4 timeframe shows a small pullback.
The main scenario is cautious buying. Technically, the pair is showing a mid-term north direction, but the movement may be limited by the first resistance level. The MACD is still near zero, and the ADX has suddenly reacted to the southern pullback. At the same time, the price is above the moving averages. Mixed technical indicators show a slowdown in growth or a temporary halt in price movement.
Alternative scenario: if the price manages to consolidate below 1.2608, the pair may resume its decline to 1.2450.
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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