by JustForex
The European currency has regained some of the losses incurred on Tuesday within the expected technical pullback. This week, investors await the ECB’s decision on the further stimulus of the Eurozone economy and the need to put pressure on bond yields. In this light, the growth of the euro may be limited.
The main scenario for trading EUR/USD is selling. The ADX is reacting to any southern price movement, which indicates the likelihood of a resumption of the decline soon. After the pullback, there is a slight decrease in bearish pressure, which may signal a short-term stop in the pair. But as long as the price stays below the moving averages, selling remains relevant.
Alternative scenario: if the price gains a foothold above the level of 1.1952, the pair may reach the 1.2113 level.
The sterling has shown about the same pullback as the euro, which indicates the absence of strong drivers for the price movement in either direction. But the British currency still looks stronger than the others. New OECD forecasts released on Tuesday show an improvement in economic growth expectations by 0.9% to 5.1% in 2021.
The main scenario for GBP/USD is trading sideways between 1.3924 and 1.3775. A decline in the Asian session has triggered a strong ADX reaction, which may signal a resumption of southward direction. But the rest of the indicators point to flat. Another important detail is that the price has stopped near the SMA 50 moving average. This casts doubt on the continuation of the pair’s fall.
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Alternative scenario: if the pair consolidates above 1.3924, it may resume its growth. A breakdown of 1.3775 could trigger a further decline.
The decline in Treasury yields and the technical pullback of the dollar index put downward pressure on the pair. At the same time, a bearish engulfing candlestick has formed on the daily chart, which may signal the beginning of a deep correction. However, the fundamental background may prevent further decline in the dollar index. The expected US inflation data may support dollar bulls.
The main scenario is cautious buying. The pullback on Tuesday did not affect the technical indicators of the northern impulse. The price holds above the moving averages, while the ADX only reacts to price increases. These are all signs of the presence of bullish power in the pair.
An alternative scenario implies the price-fixing below 108.36. In this case, the pair may return to the decline to 107.08.
USD/CAD continues to remain in a narrow sideways range. The intraday price movement leaves long shadows in both directions, which is a sign of a flat. But today the pair may get out of the narrow range after the publication of the decision of the Bank of Canada.
The main scenario is trading in a sideways range between 1.2745 and 1.2592. None of the indicators signal the beginning of any movement in the medium term. The MACD is near zero, and the price shows frequent breakouts of the moving averages. This indicates the continuation of trading in a narrow sideways range.
Alternative scenario: if the price manages to gain a foothold above 1.2745, the pair may resume growth to 1.2845. A breakdown of 1.2592 will resume southward movement.
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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