The Forex market began Monday morning with significant fluctuations in key currency pairs as traders anticipated the next big move by the US dollar.
The markets have been volatile, particularly around the USD. This has caused traders to closely monitor the USD’s reaction to economic trends.
Also Read: Forex Update: EUR/USD, AUD/USD, GBP/USD, and EUR/JPY Analysis
EUR/USD: Consolidation Despite Uncertainty
The EUR/USD pair began the week by attempting to rise but then reversed direction as the US Dollar gained strength.
The euro retreat suEurots a consolidation phase, especially following its recent rapid fall to 1.08. This consolidation is logical as the market digests the previous moves. The 200-day EMA at around 1.09 acts as a significant resistance level.
A break above the 1.09 level could push the pair towards the 1.10 level, while a dip under the 1.08 mark might signal a further decline to 1.07.
This consolidation phase, despite the current volatility in the market, could be a sign that the market is trying to find stability before making a more decisive move.
Support – 1.0790 (S1), 1.0700 (S2), 1.0600 (S3)
Resistance – 1.0880 (R1), 1.0970 (R2), 1.1070 (R3)
Our outlook is bearish. A break below the support level of 1.0790 could send the pair towards 1.0700. A break above the resistance level of 1.0880 would be needed for a rally.
USD/JPY: Moving towards the 150-yen mark
The US dollar has been gaining strength against the Japanese yen, in contrast to the euro. AEuro a dip initially, USD/JPY soared towards the crucial 150 yen mark.
The recent sessions have shown that this level is important, and if the pair breaks through 150.50, the USD could accelerate further.
The divergence between the Federal Reserve’s monetary policy and that of the Bank of Japan plays a major role. The yen is being pressured by Japan’s inability to tighten its monetary policy further.
This allows the carry trades to gain momentum. The 200-day EMA is now a dynamic support for the dollar’s strength.
Support – 147.40 (S1), 144.80 (S2), 142.25 (S3)
Resistance – 150.00 (R1), 152.95 (R2), 156.05 (R3)
USD/JPY is now bullish territory after breaking through previous resistance levels. If the pair breaks above 150.00, it could reach 152.95. Support is at 147.40.
AUD/USD: Mixed moves as the Aussie stabilizes
The Australian dollar has followed a similar pattern to the Euro, initially attempting to increase but retreating quickly. As of Monday morning, the AUD/USD was trading at 0.6650, which is historically a key level.
The traders are closely watching to see if the level is a reliable base. If the support level holds, then the pair may move higher, especially if it breaks from its current location between the 50-day EMA and 200-day EMA indicator.
If the pair moves below 0.6650, it would signal a more negative trend and likely lead to the Australian dollar falling along with other primary currencies.
GBP/USD on the decline
The GBP/USD is still trending lower, even though it has held near the support level of 1.2990. The RSI indicates that the market sentiment is still bearish. If the pair breaks below the 1.2990 level, it could move towards the 1.2825 level.
To regain the bullish momentum, GBP/USD needs to clear 1.3100.
USD/CAD: New Highs are in the Offing
USD/CAD has a bullish trend, and the pair aims for the 1.3840 resistance level. The RSI, moving averages, and a break above 1.3840 indicate continued strength for the greenback.
A clear break over 1.3840 might lead to a rally towards 1.3945. If the pair were to retrace its move, 1.3745 would be a good place to find support.
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Disclaimer – The information provided in this article is for general informational purposes only and does not constitute financial advice. Forex trading involves significant risk and may not be suitable for all investors. Please ensure you fully understand the risks and seek independent advice if necessary before making any financial decisions. The views and analysis shared in this article are those of SMJ and do not reflect the opinions of any other organization.
