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

[MongiIG]

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.

 

Source: Bloomberg

 

Shares United States dollar Japanese yen Euro USD/CAD USD/JPY

 

 Written by: Diego Colman | Market Analyst, New York | Publication date: Wednesday 24 January 2024 06:04

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

 

Source: 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

 

Source: 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

 

Source: TradingView

 

 

 

 

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