Technical Outlook on USD/JPY, EUR/USD, and BTC/USD
(Source: FXStreet, authored by Fawad Razaqzada)
In the latest update from FXStreet, market analyst Fawad Razaqzada delves into the technical outlook across three major financial instruments: USD/JPY, EUR/USD, and Bitcoin (BTC/USD). Amid ongoing volatility across global markets, these assets are all showing interesting technical developments that could provide key trading opportunities. Below is a detailed breakdown of each asset, organized by trend direction, emerging patterns, and key levels to watch.
USD/JPY: The Dollar-Yen Pair Holds Strong Despite Risk Sentiment
The USD/JPY pair continues to show resilience, trading higher despite risk-off sentiment prevailing across most global markets. Several factors have contributed to the climb of the US dollar against the Japanese yen, and ongoing economic data releases and monetary policy decisions will continue to influence momentum.
Key Technical Highlights:
– The pair has broken through several resistance levels and is poised to challenge new highs.
– Bulish momentum remains the dominant theme, with moving averages aligned favorably.
– The relative strength index (RSI) is hovering near overbought territory, but not yet at extreme levels.
– Key support lies at around the 145.00 level, a zone that previously acted as resistance.
– On the upside, the 150.00 psychological barrier represents a critical level to watch.
Fundamental Drivers:
– The Federal Reserve’s hawkish stance and the resilient performance of US economic data have supported the US dollar.
– In contrast, the Bank of Japan (BoJ) maintains an ultra-loose monetary policy amid low inflation, keeping the yen under pressure.
– Intervention risk from Japanese authorities could increase if USD/JPY pushes further above the 150.00 level.
Technical Analysis Insights:
– As long as the pair remains above its rising trendline and the 21-day exponential moving average (EMA), the path of least resistance remains up.
– Should the pair drop below the recent swing lows around 145.00, it may open the door for a deeper correction towards 143.00 or even 140.00.
– For now, traders should keep a close eye on momentum indicators and be cautious about entering long trades near overbought levels unless accompanied by strong confirmation signals.
EUR/USD: Euro Faces Continued Pressure Against the Dollar
The EUR/USD pair has been facing sustained downside pressure, in part due to favorable macro conditions for the US dollar and weak economic indicators from the Eurozone. Despite oversold conditions in some metrics, the bears are firmly in control.
Key Technical Highlights:
– Price action has been producing consistently lower highs and lower lows, suggesting a well-established downtrend.
– The 1.0800 support was broken decisively, opening the door for a continued move down toward 1.0650 and possibly further.
– Resistance now sits near 1.0830 to 1.0850, which could serve as a potential re-entry point for short sellers.
– The 50-day SMA (simple moving average) is sloping downward, reinforcing the bearish trend.
Fundamental Drivers:
– A weakening European economy, coupled with cautious European Central Bank (ECB) rhetoric, has added to euro weakness.
– In contrast, better-than-expected US economic data continues to provide strength to the dollar.
– Interest rate differentials between the US and the EU continue to widen in favor of the greenback.
Technical Analysis Insights:
– With the RSI near oversold conditions, short-term corrections are possible but would likely be shallow unless supported by a fundamental shift.
– If bulls wish to regain some control, they would need to break decisively above the 1.0900 mark and hold above that level.
– As updates from central banks and economic data releases continue to roll in, volatility is likely, particularly around key resistance and support levels.
Traders should:
– Monitor key support at 1.0650. A
Explore this further here: USD/JPY trading.