Eurodollar Reversal Underway?

• 3 Aug 2020

USD/JPY

The USD/JPY pair has moved to test the 106.05 resistance level after recovering from a sell-off during the last trading week. Selling pressure has risen at this resistance area, however, indicating that the pair may struggle to return to the previous trading range between 106.05-107.94. The longer-term bearish trend remains intact. Momentum indicators are returning from oversold conditions. 

 

 

 

 

 

EUR/USD

A Eurodollar reversal appears to be underway, as sellers returned at the 1.184 price level. A support level exists at the 1.149 price level, after which, the pair initiated a week-long bearish streak. Momentum indicators are also undergoing bearish reversals with RSI moving to test the 70 overbought line.

 

 

 

 

 

GBP/USD

The GBP/USD pair has pulled back from the 1.311 resistance line as a doji candle signifies the reversal of the bullish run. A trading range exists between the 1.288 and 1.311 price levels. Given the current momentum, the reversal may lack the legs to initiate a break of the trading range. Momentum indicators have flattened in bullish territory which may suggest that a momentum reversal is imminent. 

 

 

 

 

 

USD/CHF

The USD/CHF pair has rebounded from the 0.908 support level as buyers return to the pair. The next resistance level is the 0.925 price line, which represents a previous low reached around the outbreak of the Covid-19 virus. Momentum indicators are undergoing bullish reversals with RSI testing the 30 support level. 

 

 

 

 

 

USD/CAD

The USD/CAD pair continues to test the 1.343 support level which, incidentally, represents the start of the ‘gap-fill’ area. A price gap occurred previously around this level, in response to a change in fundamentals brought about by the pandemic outbreak. Overall, the longer-term trend is bearish and therefore any attempts to drive price action by buyers tends to be short-lived. Momentum indicators have flattened in bearish territory. 

 

 

 

 

 

GOLD

Gold buyers have stalled at the 1975.67 resistance line after an exclusively bullish seven days of trading. There are not currently any signs of a price reversal, yet buyers have been held. Overall, the longer-term trend is bullish. Momentum indicators are bullish yet RSI is beginning to show of a slowdown in bullish momentum, with a return towards the 70 resistance line.

 

 

 

 

 

OIL

WTI is stuck to the gap-fill line (just below the trading range established before the covid-19 outbreak) yet a break has not materialized. Until economic momentum begins to lift and full capacity returns to the economy, we are unlikely to see any upwards pressure in price. Momentum indicators have a bearish bias.