By ForexTime
A sense of caution returned to markets on Wednesday as concerns over soaring inflation and slowing economic growth punctured risk sentiment. King dollar drew strength from the negative vibes while sterling weakened after UK inflation hit double digits. In the commodity space, oil prices edged cautiously higher thanks to bullish signals but gold tumbled with bears eyeing $1615. With the economic calendar relatively light today, markets could be influenced by corporate earnings and other key themes influencing sentiment. Our focus falls on the currency space with the tool of choice none other than technical analysis.
EURUSD eyes 0.9700
The path of least resistance for the EURUSD points south. Prices are trading below the 50, 100, and 200-day Simple Moving Average while the MACD trades below zero. A stronger dollar may drag the EURUSD and may pull prices closer to 0.9700. If this support is breached, the next key level can be found at 0.9500. A move back above 0.9900 could open the doors back to parity.
GBPUSD…watch the range
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Prices remain trapped within a wide range with support at 1.0925 and resistance at 1.1400. Sustained weakness under this resistance is likely to open the doors towards 1.1200 and 1.0925. If bulls can push prices above 1.1400, then an incline toward 1.1490 (where the 50-day SMA resides could be on the cards).
AUDUSD gearing for major breakdown
The trend is bearish on the AUDUSD. Prices are currently within a range with support at 0.6200 and resistance at 0.6340. A breakdown below 0.6200 could trigger a selloff towards 0.6000. If prices can break above 0.6340, the AUDUSD could test 0.6550.
USDJPY keeps pushing higher
After securing a daily close above 149.00, USDJPY bulls are certainly in the driver’s seat. The currency pair is trading at levels not seen in 32 years thanks to verbal intervention by the Bank of Japan and an appreciating dollar. The upside momentum could take prices towards 150.00 and higher. A move back below 149.00 could trigger a selloff towards 145.00.
USDCAD ready to move?
Nothing much has happened on the USDCAD over the past few days. Prices have been trapped within a tight range with support at 1.3700 and resistance at 1.3840. Given how the dollar is back on the rise amid risk aversion, the USDCAD could conquer 1.3840 and 1.4000, respectively. If prices end up breaking below 1.3700, bears may target 1.3502.
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