EURUSD, GBPUSD and AUDUSD prices oversold in uptrend
Volatile trade, following Fed Chair Jerome Powell’s comments at the Economic Club of Washington DC, has ultimately ended in gains for major US indices and some minor losses for the US dollar.
Acknowledgement from the Fed chair, that the disinflation process had begun, might have provided some excuse for a softer dollar, although there was also a suggestion from Jerome Powell that rates could rise further than markets are currently pricing in if inflation starts to rise again.
Markets appeared to dismiss the ‘hawkish’ comments from the Fed, and major benchmark indices have started to extend the bullish trends we have seen this year, while the dollar has paused gains (for now at least).
EUR/USD
The moving 20 (red), 50 (green) and 200 (blue) day simple moving averages (MAs) reaffirm the upward trend bias for the EUR/USD. The stochastic oscillator currently trades in oversold territory whilst displaying a positive divergence (dotted red lines) with the price.
The technical indications for the EUR/USD remain bullish for the time being. The recent retracement in price looks to have found support at the 50MA and 1.0707 support level. We are looking for a strong close on today’s (8 February 2023) candle. In this scenario 1.1035 becomes the initial upside resistance target from the move, while a close below the low at 1.0670 might be used as a stop loss indication for the trade should it manifest.
GBP/USD
The GBP/USD currently trades in a short to medium term rangebound environment, although the longer term trend is still considered up. The price looks to be forming a bullish price reversal from oversold territory, whilst also displaying a bullish divergence (dotted red lines).
The bullish indications suggest a possible range trade opportunity forming. Confirmation thereto would be a strong close on today’s candle. In this scenario, 1.2440 becomes the initial resistance target from the move, while traders might consider using a close below the 1.1850 level as a stop loss indication for the trade (should it manifest).
AUD/USD
The AUD/USD is trading similarly to the EUR/USD currently.
The moving 20 (red), 50 (green) and 200 (blue) day simple moving averages (MAs) reaffirm the upward trend bias for the currency pair, while the stochastic oscillator trades through oversold territory (although not displaying a bullish divergence as with the EUR/USD).
The technical indications for the AUD/USD remain bullish for the time being. The recent retracement in price looks to have found support at the 50MA and started to reverse off this level. 0.7155 becomes the initial upside resistance target form the move, while a close below the low at 0.6853 might be used as a stop loss indication for the trade.
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