by JustForex
The US dollar ended the week with an increase of about 0.6% against the euro. The US policy prospects, which increased the US Treasury bond yields, had a positive effect on the dollar index. On the other hand, last week, ECB officials said they plan to start cutting stimulus programs in the next quarter, which will play in favor of strengthening the European currency in the medium term.
From the technical point of view, the general trend on the EUR/USD currency pair is bullish, but on the background of the dollar index growth, the EUR/USD quotes are declining, forming a local downtrend. The breakout of the downtrend line was false on Friday. The MACD indicator is in the negative zone, but there are the first signs of sellers’ weakness. Under such market conditions, buy trades can be considered from the support levels, or after the breakout of the downtrend line. It is better to look for sell trades from the resistance levels, where sellers show initiative.
Alternative scenario: if the price breaks through the 1.1704 support level and fixes below, the mid-term uptrend will likely be broken.
The growth of Great Britain’s economy slowed down, as the increase in the number of coronavirus cases and the shortage of labor has inflicted a hit on the recovery. Due to a large labor shortage and the complex procedure for hiring foreign workers, the United Kingdom is at risk of a shortage of products on store shelves. According to the representative of Logistics UK, currently, the lack of drivers ranges from 90,000 to 120,000 people, while British are reluctant to work in this industry. The UK-EU trade volume is also decreasing as Brexit and Covid reduced exports.
On the hourly time frame, the GBP/USD trend is bullish. But amid the growth of the dollar index, the GBP/USD quotes are declining. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from the support levels near the moving average line. Sell positions can only be considered from the resistance levels with short targets throughout the day.
Free Reports:
Alternative scenario: if the price breaks through the 1.3692 support level and consolidates below, the bearish scenario will likely resume.
The producer price index in Japan remained at about the same level, indicating that inflation at industrial companies is not rising. Many economists expect that Japan’s new prime minister will continue working on monetary policy stimulation along with the National Bank of Japan.
The main trend on the USD/JPY currency pair is bullish. But the Japanese yen has shown strength in recent days, which, together with the rise in the dollar index led to the formation of a wide trading range, within which the price has consolidated. The MACD indicator has become inactive. Under such market conditions, traders should look for buy trades from the support level where buyers show initiative throughout the day. Sell positions should be considered on the lower time frames with short targets from the zones where sellers show initiative.
Alternative scenario: if the price falls below 109.43, the uptrend is likely to be broken.
In Canada, the unemployment rate decreased to 7.1% after companies added 90,200 jobs in August. This is a good sign for the economy. 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. Both the dollar index and oil prices increased at the end of last week. As a result, the price of USD/CAD is trading in a wide corridor with a slight advantage of the dollar index, which contributes to the growth of quotes.
In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. But the price has consolidated in a local correctional upward movement. The MACD indicator shows weak buying pressure. Buy positions can be considered from the support levels where buyers show initiative, and only with short targets. It is better to look for sell positions from the resistance levels of a higher time frame.
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.
By RoboForex Analytical Department The NZD/USD pair has experienced a significant decline, touching a low…
By Adriana Craciun, Boston University Two-thirds of the world’s food comes today from just nine…
By JustMarkets At Monday’s close, the Dow Jones Index (US30) increased by 0.99%. The S&P…
By Dan Kotlyar, Georgia Institute of Technology NASA plans to send crewed missions to Mars…
By Paula M. Carbone, University of Southern California Fast fashion is everywhere – in just…
By JustMarkets At Friday’s close, the Dow Jones Index (US30) was up 0.97% (week-to-date +1.99%).…
This website uses cookies.
