In this article, we have covered the highlights of global market news about the EUR/USD, USD/JPY, USD/CAD and GBP/USD.
EUR/USD speeds up advances and refocuses 1.0600
The euro regains some equilibrium as Wednesday’s sharp decline to the 1.0520/15 zone against the Dollar is mostly forgotten.
After three straight weeks of gains, EUR/USD enters the first week of 2019 on the back foot, but Wednesday’s recovery focuses on a possible test or breach of the 1.0600 barriers.
The pair have been in a better mood due to the knee-jerk reaction in the Dollar that followed the significant rebound earlier in the week.
Following two consecutive daily retracements, the 10-year Bund yields in the German money markets look to be recovering some upward momentum.
Before the US ISM Manufacturing and the release of the FOMC Minutes from the December meeting, the final December Services PMI data in the euro area will take center stage later in the day.
This week, the EUR/USD has encountered some good resistance around 1.0520.
The euro is anticipated to closely track dollar fluctuations, the region’s reaction to the oil crisis, and the Fed-ECB gap in the interim.
USD/JPY Price Analysis: More downside seems to be preferred as US rates continue losses
In the early European session, the USD/JPY pair is fighting to maintain its comeback over 131.00. Earlier, the asset recovered when buyers were active at 129.50, supporting the US Dollar in a risk-off market environment.
Investors are looking for a new trigger to make a significant move. Therefore the US Dollar Index (DXY) is showing a muted performance.
One could readily see the downtrend’s persistence in a four-hour timeframe and the lack of any US Dollar rebound movement. The Relative Strength Index (RSI) (14) is consistently below 60.00, indicating that the trading activity is in a “sell on rise” setting.
In addition, the 20- and 50-period Exponential Moving Averages (EMAs) at 131.15 and 132.15, respectively, imply more weakening.
It would be wise to hold off on opening a short position until a rise back toward the 50-period EMA around 132.15, which would push the asset toward the psychological barrier at 130.00 and the low on May 4 at 128.63.
USD/CAD Price analysis: A new upside must cross 1.3700.
The USD/CAD pair has decreased to close to 1.3636 in the Asian session after many unsuccessful efforts to overcome the crucial barrier of 1.3680. Due to investors’ restrictions on taking prospective positions before the US ISM Manufacturing PMI data publication, the US Dollar Index is performing subdued right now.
After a two-day sell-off, S&P500 futures are now trying to rebound. However, resilience in recovery still needs to be improved, indicating that the risk profile is still unfavorable.
Investors should notice that the trend has changed from topsy-turvy to positive on a four-hour basis. The horizontal resistance line drawn close to the round-level obstacle of 1.3700 is where the loonie asset is expected to run into obstacles.
The 20- and 50-period Exponential Moving Averages (EMAs) at 1.3578 forms a bull cross, which suggests more upward movement.
The Relative Strength Index (RSI) (14) has meanwhile surged into the bullish zone of 60.00-80.00, indicating more gain is yet to come.
The US Dollar will gain, and the Loonie asset will go toward the highs of October 25 at 1.3748 and November 3 at 1.3808 with a clear break over the December 16 high at 1.3700.
GBP/USD Price Analysis: Struggles to retake auction above 1.2000
In the Asian session, the GBP/USD pair seeks to overcome the psychological barrier of 1.2000. Investors are waiting for the publication of the United States ISM Manufacturing PMI data for new impetus. Therefore the Cable is exhibiting erratic movements in a band of 1.1960-1.2000.
The US Dollar Index (DXY) shows rangebound movements at 104.20. S&P 500 futures are showing slight increases after Tuesday’s sell-off. The yield on the US 10-year Treasury has decreased even further to 3.73%.
The consolidation created in the band of 1.2000-1.2123 formed on a four-hour timeframe was broken earlier by the Cable. To break through the psychological obstacle of 1.2000, the pair aim to restore an auction profile.
The main’s 200-period Exponential Moving Average (EMA) has been safely established below 1.2024, indicating that the current long-term trend is negative. The 50-EMA around 1.2054 is also a significant roadblock for the pound sterling.
Notably, the Relative Strength Index (RSI) (14) was able to solidly recover after falling within the negative 20.00-40.00 area, demonstrating that the environment for value-buying is still in place.
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