by JustForex
The unemployment rate in Europe decreased to 7.6% (previous – 7.8%). But economists believe that the fall in unemployment in the eurozone was caused by a drop in the labor force as a whole rather than an increase in employment. Against the background of the decline in the dollar index, as well as investors’ concerns about the fact that the ECB may start to take actions to suppress inflation, the European currency rate increased. The ECB is planning to hold a monetary policy meeting on September 9.
From a technical point of view, the general trend of the EUR/USD currency pair has changed to bullish. The price broke through the priority change level and consolidated above. But the MACD indicator is still signaling a divergence in the opposite direction. The price has deviated from the moving average; given the divergence, the probability of a corrective downward move is increasing. Under such market conditions, it is best to look for sell trades from the resistance levels, where sellers show initiative. Buy trades can be considered only after a pullback to the support levels near the moving average.
Alternative scenario: if the price breaks through the 1.1704 support level and fixes below, the mid-term uptrend will likely be broken.
The UK Manufacturing PMI increased to 60.3 in August, which is higher than experts forecasts. This is a good sign as the UK manufacturing growth has slowed sharply in recent weeks.
On the hourly time frame, the GBP/USD trend is bearish. But the local trend is upward, and the price is trading near the priority change level. Against the background of the dollar index decline, this level can be easily broken. The MACD indicator has become inactive. Under such market conditions, it is better to look for sell trades from the resistance level, where sellers show initiative. Buy positions can be considered only with short targets throughout the day.
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Alternative scenario: if the price breaks through the 1.3793 resistance level and consolidates above, the bullish scenario will likely resume.
The USD/JPY currency pair is highly dependent on the dynamics of the dollar index now. During the American session, the dollar index fell, which led to a decrease in the USD/JPY quotes. As a result, the price returned to the wide corridor, forming a false-break zone above.
The main trend of the USD/JPY currency pair is bullish. Due to the dollar index decline, the price returned to the wide corridor yesterday. The MACD indicator has become inactive again. Under such market conditions, traders should look for buy trades from the support level, where the buyers show initiative. Sell positions should be considered only on the lower time frames from the false breakdown zone.
Alternative scenario: if the price falls below 109.43, the uptrend is likely to be broken.
The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Yesterday, both the dollar index and oil prices decreased. As a result, the USD/CAD currency pair is trading in the corridor without any dynamics.
In terms of technical analysis, the USD/CAD trend is still bullish. The price was testing the priority change level yesterday but it couldn’t break through the level. It is better to look for buy positions from the priority change level where buyers show initiative. Sell positions can be considered from the resistance levels, or after the breakthrough of the 1.2583 support level.
Alternative scenario: if the price breaks through the 1.2583 support level and fixes below, the uptrend will likely be broken.
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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