Oil Recovery Is Complete

• 8 Feb 2021

USD/JPY

The USD/JPY rally has stalled at the 105.40 resistance level, where selling pressure has risen. Buyers have returned in early trading yet a break has not materialised. Sentiment has been strongly bullish in recent trading and represents a trend change for the pair. Momentum indicators are bullish with RSI testing overbought conditions.

 

 

 

 

GBP/USD

GBPUSD buyers are still active yet there is low conviction currently, as the pair has failed to move beyond the 1.368 resistance line. A breakout seems inevitable given the number of tests of the resistance area and the longer-term, well established bullish sentiment. Momentum indicators have flattened in bullish territory.  

 

 

 

 

EURUSD

The Eurodollar has rebounded from the 1.192 support level and is now approaching the ascending trendline. The bullish revival may indicate that the pullback is short-lived with price action likely to move higher in the future. Momentum indicators remain in bearish territory, with RSI moving away from oversold conditions.

 

 

 

 

USDCHF

The USDCHF pair has pulled back from the 0.903 resistance line and stalled at the 0.898 support level. The attempt to move back to a previous trading range met with increased selling activity. Whether another attempt will be made remains to be seen. Momentum indicators are bullish yet RSI is pulling back from overbought conditions.

 

 

 

 

USDCAD

The USDCAD has failed to move beyond the descending trendline indicating that sentiment remains bearish. A move back towards the 1.269 support area seems likely with potential for a bearish breakout. Momentum indicators have flattened in neutral/bearish territory.  

 

 

 

 

XAUUSD

The XAUUSD may consolidate in the current range between the 1778-1829 price levels, as sellers have returned before the metal could reach the 1829 resistance area. Longer-term bearish sentiment remains. Momentum indicators have stalled in bearish territory. 

 

 

 

 

USOUSD

The USOUSD is approaching a long-term resistance area which represents pre-covid price levels. The extent of the recovery is clear, perhaps the only question is whether it can be sustained. Momentum indicators are strongly bullish with RSI moving beyond overbought conditions. 

 

 

 

 

JP225

The JP225 index has broken the 28,825 ceiling as bullish momentum begins to climb. Given the number of attempts and difficulty to drive the break, buyers’ conviction is strong; whether it can be sustained is another question.  Momentum indicators have sharp upward trajectories.