FOREX CHART ANALYSIS FEB 20 - EYES ON USD
Strong and unexpected fluctuations occurred in the middle of the week. The market is currently having asynchronous, typically the increase in USD is reflected in only a few currency pairs, the rest is eliminated. Let's see what those changes are all about and pick the suitable forex trading strategies!
- With the economy maintaining its strength, the US dollar continues to attract investors as the flu continues to overwhelm China and other Asian economies, while in Europe shows very few signs. growth.
- German exports to the UK - the country's fifth-largest export partner - have declined in the fourth year in 2019. The main reason comes from the GBP depreciation and uncertainty over trade regulations. Post-Brexit disrupted existing supply chains.
- According to a survey with Reuters traders and analysts, China is expected to lower its benchmark lending rate on Thursday, after it lowered interest rates on medium-term loans earlier this week.
The biggest change yesterday was USDJPY. The pair has had the strongest gaining session in recent months, breaking the downtrend line that has existed for over 4 years. Looking at the weekly chart, we can clearly see this. Therefore, in the medium and long term, we will prioritize buying. Those who are trading in the short term may follow the bearish signal that has just appeared to eat the recovery wave, expect the price to be back to the zone of 110.8 and then continue to bounce up.
EURUSD hasn't shown any signs of recovery yet. Price remains below the resistance of 1.08. The longer this accumulation area accumulates, the higher the probability of further decrease. Not currently trading this pair. For short-term traders, you can wait for the signal to increase to get a recovery wave but it is likely that after a further decline. Pay attention to the resistance area of 1.075.
After a period of accumulation, the selling side eventually prevailed. Selling pressure is overwhelming. The zone of 1,295 has been penetrated and the possibility of the lower boundary of the triangle accumulation area, the price zone of 1.285. Priority to sell in the short term.
Despite the USD's momentum, the pair is still moving as expected. The resistance zone of 1,320 is about to be approached. Everyone should pay attention to prepare to exit the sell order. This is a good confluence zone, so prices are likely to bounce up from this. However, it is unlikely that the medium-term uptrend will return because in a broader view, the price is on top of a large range.
Price has not escaped the narrow triangle. However, with current price action, it seems the support zone below will be broken. If the breakout is successful, the price can easily approach the new bottom of 0.660.