USDJPY Looks Set For a Correction, EURAUD Eyes A Break
- US dollar after surging against the Japanese yen looks like set for a short-term correction.
- Japan’s Consumer Price Index (CPI) came in at 3.3%, compared to the expectation of a 3.4% rise.
- Euro attempts to correct higher, but might fall against the Australian dollar if it breaks the 1.4460 level.
- GBPUSD survived yesterday, and managed to hold an important support area of 1.6280.
The US dollar traded close to the 109.40 level against the Japanese yen during the NY session yesterday, but failed to gain momentum above the mentioned level. It looks like that the 109.40-50 area is turning out to be a major barrier for the USDJPY pair. Earlier during the Asian session, the pair traded as low as 108.43 and managed to find buyers. However, the pair has breached an important bullish trend line, which might act as a resistance for the pair in the short term. Moreover, the pair also closed below the 100 hourly moving average, which is acting as a hurdle as of writing. So, the 108.80-90 levels might act as a swing zone for the pair, and if the US dollar sellers fail to defend the same, then a move towards the last high is possible.
Intraday Support Level – 108.40
Intraday Resistance Level – 108.90
- Overall, as long as the pair stays below the 108.90 level more losses below the recent low are possible.
- One might consider a small sell position around the highlighted resistance area with a tight 15 pips stop.
If the pair fails to break above the 108.90 level and moves lower again, then it would be interesting to see reaction of the US dollar buyers around the last low of 108.40. A break and close below the mentioned level could take the pair towards the 108.00 area.
The Australian dollar continues to move lower against all other major currencies, including the Euro. The EURAUD pair is trading in the bullish zone, as it is trading above both the 100 and 200 hourly moving averages. However, it remains at risk of a break lower. There is a bullish trend line on the hourly chart of the EURAUD pair. Currently, the pair is trading around the highlighted trend line, which also coincides with the 38.2% fib retracement level of the last leg from the 1.4375 low to 1.4520 high. There is a chance that the pair might bounce from the current levels back towards the last swing high.
Intraday Support Level – 1.4460
Intraday Resistance Level – 1.4520
- A break and close below the 1.4460 level might be considered as a bearish call in the short term.
- Hourly RSI is still above the 50 level, which is a good sign for the Euro bulls.
Moreover, the hourly MACD indicator is showing a minor divergence, which can produce a bounce in the pair. So, as long as the pair holds above the 100 hourly moving average, it remains a buy on dips.
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