For this 03/12/2022, we look at currency pairs making waves from Technical Analysis Perspective.
Traders of different trading time frame philosophies would agree that it is important to gain an understanding of a currency pair's price action. This importance varies among traders, but it still remains important as traders look to buy low and sell high. Every trading day presents new opportunities to examine price movement (technical analysis) in the FX Market.
Let’s examine the currency pairs that have made the most recent technical analysis moves with various indicators. This is not an exhaustive list, this is just a selection of sovereign currency pairs that have made a significant movement or have made a shift. None of the below is financial advice, you are encouraged to do your research before trading or investing in any securities. FX positions and leveraged trading carries risk of loss of investment principal.
Currency Pair #1:AUD_JPY
The daily chart of AUD_JPY has the Relative Strength Index (RSI) rising above 75 in the previous trading day, which indicates that the stock is overbought. This is commonly used in conjunction with other indicators to confirm a possible situation where one would go short on this currency pairing, or take profits from a long position.
Currency Pair #2:EUR_USD
The daily price is below the cloud (kumo), the price is below the Kijun Sen (a measure of the average of the highest high and lowest low over the last 26 periods, which happens to be days on a daily chart), and the Tenkan Sen (a measure of the average of the highest high and lowest low over the last 9 periods, which happens to be days on a daily chart) is below the Kijun Sen. All of this points to a bearish trend.
Currency Pair #3:GBP_USD
GBP_USD is in an oversold state according to the RSI on a 14 period basis on a daily chart. The determination of an oversold state is that the RSI is below 25. Price action according to this popular indicator has reached a point of bearish exhaustion and there's a possible opportunity for buyers and profit-takers in short positions.
Currency Pair #4:NZD_JPY
The Relative Strength Index (RSI) on a 14 period measurement on a daily chart, which means 14 trading days are considered in the indicator's findings, shows us that NZD_JPY is in an overbought state. Criteria differ as far as what would be considered overbought, some have it at above 80 and others have it at above 70, in these reports, the decision is to compromise in the middle at 75. What does it mean to be in an overbought state? It means that the price action has reached a point of bullish exhaustion according to the RSI and there's a possible opportunity for sellers and profit-takers in long positions.
Currency Pair #5:USD_CAD
USD_CAD is appearing bullish according to the Moving Average Convergence Divergence (MACD) indicator on a hourly chart with the common default settings of a 12 hour Exponential Moving Average less the 26 hour Exponential Moving Average with the 9 hour Exponential Moving Average to be used as the Signal Line. The signal line crossed above the MACD Line and the MACD Histogram crossed above the Zero Line in the previous trading hour on the hourly chart.
Currency Pair #6:USD_CHF
In this examination of USD_CHF's hourly candlestick chart (H1) it has a Relative Strength Index (RSI) that is above 75 in the previous trading hour. As far as a 14 hour RSI is concerned, it is in overbought condition. When used with other indicators and price action, it could help in providing the conditions where one would take a short position or take profits from a long position.
Currency Pair #7:USD_MXN
USD_MXN is appearing bearish according to the Moving Average Convergence Divergence (MACD) indicator on a hourly chart with the common default settings of a 12 hour Exponential Moving Average less the 26 hour Exponential Moving Average with the 9 hour Exponential Moving Average to be used as the Signal Line. The signal line crossed below the MACD Line and the MACD Histogram crossed below the Zero Line in the previous trading hour on the hourly chart.
The hourly price is below the cloud (kumo), the price is below the Kijun Sen (a measure of the average of the highest high and lowest low over the last 26 periods, which happens to be hours on a hourly chart), and the Tenkan Sen (a measure of the average of the highest high and lowest low over the last 9 periods, which happens to be hours on a hourly chart) is below the Kijun Sen. All of this points to a bearish trend.