This week has been relatively quiet so far
EUR/USD topped off from 1.2690 last Friday and fell to 1.2565 by the end of the 7/2 US trading session. During the 7/3 session, it has been quiet, edging up to test the 1.2610 level which was a support pivot form the previous session. As we gear up for the US session, it is trading around 1.2585 in the middle of the 7/3 range so far between 1.2565 and 1.2610.
The 1H RSI was held above 40. You can say that the bullish momentum from last Friday is still not gone, and the market still has bullish bias.
GBP/USD is trading in a range roughly between 1.5655 and 1.5727. After breaking above last Friday’s high briefly, it has remained range-bound, although you can say that the momentum remains biased to the upside, according to the RSI reading, which is still above 40 after tagging 70.
The USD/JPY fell to a low of 79.29, during the 7/2 session, but has since rallied. It is in a non-directional market. The momentum appears to be stuck between 40 and 60, which is a sign of a market in consolidation. If the market does break the 80.00 handle, and the RSI does push above 60, we have an intra-session bullish continuation toward last week’s high near 80.60.
Commodity currencies edged higher
The USD/CAD has been testing a previous consolidation support near 1.0150. Both the 7/2 and 7/3 sessions have put in new lows below last Friday’s. The RSI has tagged 30 again in the 7/3 European session. The bearish bias in both price action and momentum are stronger than the bullish momentum in the EUR/USD, GBP/USD and USD/JPY.
It is however showing some slowdown to this bearish momentum in the form of a 3-point bullish divergence with the 1H RSI.
The AUD/USD edged higher in the Asian session before the RBA interest rate announcement. It has put in new highs above last Friday’s. Price action and the RSI point to a bullish market, but does show some early signs of exhaustion with a 3-point bearish divergence. Remember exhaustion does not always lead to meaningful reversals. The market can rest in sideways action too.
Won’t repeat the similar price/momentum conditions that AUD/USD has. However, as we get the US session started NZD/USD has broken below a short-term trendline holding price action since last Friday. This signals a test of the support pivot near 0.7995. The RSI will also likely test 40. Let’s see if price action can hold at that support, and if the 1H RSI reading can stay above 40 and maintain bullish bias.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.