by JustForex
Good data on the US labor market has not stopped the decline of the US dollar. The decline in the dollar index plays in favor of the euro strengthening. Considering that investors are betting on the recovery of the European economy, the euro exchange rate may significantly strengthen in the next 1-2 months.
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. The MACD indicator is still signaling a divergence in the opposite direction. The price has deviated from the moving average; given the divergence, there is an increasing probability of a corrective downward movement. 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 British pound is also getting stronger against the background of the dollar index decline. The growth of quotes is also supported by the growth of Brent oil price. The UK will report on the situation in the industrial and service sectors today.
On the hourly time frame, the GBP/USD trend changed to bullish. The price broke through the priority change level on the impulsive movement and consolidated higher. The MACD indicator is in the positive zone, and there are the first signs of divergence on higher time frames. Under such market conditions, it is better to look for buy trades from the support levels after the price pullback, as the price has now deviated strongly from the moving average. Sell positions can only be considered from the resistance levels with short targets throughout the day.
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Alternative scenario: if the price breaks through the 1.3692 support level and consolidates below, the bearish scenario will likely resume.
The USD/JPY currency pair is highly dependent on the dynamics of the dollar index now. The dollar index is declining, which leads to a decrease in the USD/JPY quotes. Japan’s services sector activity contracted at the fastest pace in over a year in August as the sharp outbreak of COVID-19 hit the recovery of the world’s third largest economy.
The main trend of the USD/JPY currency pair is bullish. The price is now trading in a narrow corridor. The MACD indicator is inactive. Under such market conditions, traders should look for buy trades from the support level, where 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. The dollar index is falling while oil prices are rising. As a result, the USD/CAD currency pair is decreasing due to the strengthening of the Canadian dollar.
In terms of technical analysis, the trend on the USD/CAD currency pair has changed to bearish. The price broke through the priority change level on the impulsive movement and consolidated below. It is now best to consider sell positions from the resistance levels, where sellers show the initiative. Buy positions can be considered from the support levels, but after additional confirmation in the form of buyers’ initiative.
Alternative scenario: if the price breaks through the 1.2812 resistance level and fixes above, the uptrend will likely resume.
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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