Title: USD Shows Mixed Performance as EUR/USD Stabilizes and USD/JPY Advances
By Greg Michalowski
Originally published on InvestingLive.com
The US dollar displayed a mixed performance in early trading today, with some notable developments among its major currency pairs. Specifically, the EUR/USD pair remained relatively flat, while the USD/JPY pushed higher amid broader market movements and technical influences. These developments come as global investors weigh recent economic data and monitor central bank commentary for clues on future monetary policy direction.
This piece provides a deep dive into the recent price action of major USD pairs, analyzing key levels, underlying factors contributing to the observed movements, and possible implications for traders in the coming sessions.
EUR/USD: Sideways Movement Around Technical Levels
The EUR/USD pair traded with little change in the early Monday session, lacking a decisive catalyst to break out of its current range. While the pair remains technically positioned below a previously broken trendline, it continues to test critical support and resistance levels that are shaping near-term sentiment.
Key insights on EUR/USD:
– The price remains below a broken trendline on the hourly chart. This trendline served as a support level earlier but now acts as resistance.
– The pair is also trading under the 200-hour moving average, which adds to the downward bias in the short term. This moving average has traditionally been a key technical obstacle for the pair.
– Currently, a swing area between 1.0844 and 1.08548 is serving as resistance. Despite multiple tests, EUR/USD has been unable to convincingly push above this zone, reflecting a bearish undercurrent.
– On the downside, supportive buying emerged near a swing area between 1.0810 and 1.08207. Buyers have stepped in at this level on two occasions this morning, a possible signal of support that traders are watching.
– If these support levels hold, a bounce toward the 100-hour moving average at 1.08687 is possible. However, failure to test these highs convincingly may trigger further weakness.
Overall, the EUR/USD remains confined within a fairly well-defined range, lacking a strong directional bias. The technical setup suggests that traders are waiting for a more decisive shift — possibly driven by economic data, central bank developments, or broader market risk sentiment — before taking stronger positions.
USD/JPY: Bullish Tone Persists Above Key Support
In contrast to the quiet tone in EUR/USD, the USD/JPY pair has broken higher in early trading, extending its gains from last week. The move reinforces a bullish technical bias, primarily driven by strong upward momentum, solid economic signals from the United States, and relatively dovish signals from the Bank of Japan.
Key highlights in USD/JPY trading:
– The pair found solid support on Friday near a moving average cluster including the 100-hour and 200-hour moving averages (currently between 149.30 and 149.50 levels), a traditional area used by traders for short-term trend confirmations.
– After bouncing from this support, the pair has continued higher and has now moved above the 150.00 mark, a psychologically important level previously capped by verbal intervention concerns.
– Monday’s price action saw the pair test higher levels toward 150.60, breaking through last Friday’s high and solidifying a bullish posture for the near term.
– Buyers are firmly in control of short-term momentum, and the lack of official intervention (despite Japanese authorities previously expressing discomfort with a weak yen) has emboldened further bullish moves.
– On the technical side, sellers may look to re-enter if the price approaches the next overhead resistance near the 150.90 to 151.00 area, levels which saw notable price reactions earlier this month.
– If the price does retrace, the 150.00 level may offer near-term support, followed again by the cluster near the 100 and 200 hourly moving averages.
The backdrop for this pair continues to tilt in favor of U.S. dollar
Read more on EUR/USD trading.