US Dollar Finds Support On FOMC Optimism

• 20 Feb 2020

USD/JPY

The USD/JPY pair surged in yesterday’s trading taking price action towards the 111.64 price line which represents a long-term resistance level not touched since May of 2019. The pair was unable to really test the resistance level and as such, a moderate pullback appears to be underway. Momentum indicators suggest the pair is oversold and the magnitude of any momentum reversal will determine whether it is a price reversal or simply a pullback. 

 

 

 

 

EUR/USD

The Eurodollar pair has entered a morning star doji pattern in recent trading, indicating that a bullish reversal may be underway. If today’s candlestick remains bullish, the Euro may get some relief from the recent sell-off. At the same time momentum indicators indicate that a bullish reversal may be beginning. RSI is pulling back towards the 30 support level after reaching strongly oversold territory whilst MACD has flattened in the sell- channel. 

 

 

 

GBP/USD

The GBP/USD pair has entered into a moderate downtrend with the descending trendline acting as a resistance level. The pair has also broken the 1.295 support level which is significant, considering the difficulty sellers have had previously in breaking this support area and the clear rise in bearish momentum required to facilitate the break. Momentum indicators have moved into bearish territory.

 

 

 

USD/CHF

The USD/CHF pair has failed to move beyond the 0.983 resistance level which represents a previous support level. Currently, buyers lack the conviction to move price action higher, perhaps indicating that the pair has reached a point of exhaustion. Further upside may be realized as RSI has fallen short of overbought territory. Momentum indicators have upward trajectories but are yet to reach overbought conditions. 

 

 

 

USD/CAD

The USD/CAD pair has pulled back towards the 1.325 support area as momentum switches sharply bearish. The approaching support level will determine where price action goes next. A break confirms the trend change; a rejection confirms a pullback in a longer-term rally. Momentum indicators are pulling back from strongly bullish positions.   

 

 

 

SILVER

Silver has stalled after some strong bullish moves. Price action has turned bearish in early trading this morning, with seemingly, a lack of support to drive price action towards the 18.62 resistance area. The next target is more likely to be the 18.09 support level. Momentum indicators are bullish with RSI falling just short of overbought territory.  

 

 

 

GOLD

Gold buyers have taken price action beyond the 1609.97 ceiling. The move may indicate a new norm for the metal, determined by its ability to remain above the 1600 threshold. Given the positioning of momentum indicators, the current level may not be sustained. Momentum indicators are bullish, however RSI is testing the 70 overbought line. 

 

 

 

OIL

WTI price action found support in yesterday’s trading session which pushed price action towards the 54.10 resistance level. The $55 per barrel range may represent a stabilizing price for the commodity as it has served as a support level in the past. Momentum indicators have upward trajectories with RSI moving into the ‘buy’ channel.