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Market update: US dollar forecast – technical analysis on EUR/USD, USD/JPY, USD/CAD


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EUR/USD above 200-day SMA, key levels at 1.0840 and 1.0770. USD/JPY eyes 149.00 breakout, potential retracement at 147.40. USD/CAD rebounds, eyes 1.3500 resistance, and 1.3415 support.

 

original-size.webpSource: Bloomberg

 
 
 Written by: Diego Colman | Market Analyst, New York | Publication date: 

EUR/USD technical analysis

EUR/USD has been moving lower this week, but has so far managed to hold above its 200-day simple moving average near 1.0840. For sentiment around the euro to improve, the bulls have to protect this floor at all costs; failure to do so could result in a pullback towards 1.0770. On further weakness, all eyes will be on trendline support at 1.0710.

In the event of a bullish reversal ahead of the European Central Bank decision, technical resistance extends from 1.0920 to 1.0935. If history is any guide, buyers will face difficulties in clearing this barrier; however, a successful breakout has the potential to usher in rally towards 1.1020. On continued upward momentum, attention will turn to 1.1080.

EUR/USD daily chart

 

original-size.webpSource: TradingView

USD/JPY technical analysis

While the Bank of Japan’s monetary policy announcement sparked some yen’s volatility, it was ultimately a nothingburger, with the institution maintaining its ultra-loose policy settings - a decision that could pave the way for further weakness in the Japanese currency.

Looking at USD/JPY, prices seem to be ready to start the next leg higher after a short period of market consolidation, as shown on the daily chart below, where the pair can be seen approaching a key ceiling near 149.00. If buyers manage to push the exchange rate above this ceiling, a retest of the 150.00 level could be just around the corner.

On the flip side, if USD/JPY reverses off technical resistance, initial support is located near 147.40, near the 100-day simple moving average. Prices are likely to stabilize in this area before resuming their bullish path; however, a decisive breakdown could pave the way for a retracement toward the 146.00 handle.

USD/JPY daily chart

 

original-size.webpSource: TradingView

USD/CAD daily chart

After a sharp pullback late last week, USD/CAD has regained ground over the past two days, overcoming significant hurdles in the process, including the 200-day and 50-day simple moving averages. Should gains accelerate in the coming days, trendline resistance appears at 1.3500. Looking higher, the crosshairs will be on 1.3540, the 50% retracement of the November/December downturn.

In contrast, should USD/CAD's upward momentum falter and prices turn lower, primary support below the key moving averages highlighted before looms at 1.3415, followed by 1.3380. Although the pair may bottom out in this region during a pullback, a decisive breakdown could create the right conditions for a drop toward the 1.3300 handle.

USD/CAD daily chart

 

original-size.webpSource: TradingView

 

 
 

 

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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