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• USDJPY is trading sideways as the yen shows some signs of life
• Market participants are preparing for central bank meetings
• Momentum indicators are mostly bullish at this stage

USDJPY is trading sideways today, following Tuesday’s red candle, which was the first negative session for this pair after six consecutive green candles that pushed it towards the 154.52 level again. While the Fed is expected to cut rates by 25bps at today’s meeting, Trump’s imminent return to the White House and the gradually reduced probability of a BoJ rate hike have contributed to the continued underperformance of the yen.  

Meanwhile, the momentum indicators are mostly bullish. Specifically, the RSI is hovering slightly above its midpoint, pointing to a weak bullish trend in USDJPY. Similarly, the Average Directional Movement Index (ADX) is edging higher, above its 25 threshold, and thus signaling a muted bullish trend in USDJPY. Interestingly, the stochastic oscillator is trading higher, above its moving average, and moving towards its overbought territory (OB). Should it return inside its OB area, it could be seen as a signal of strong bullish pressure in USDJPY.

Should the bulls remain hungry, they could try to push USDJPY above the June 4, 2024 low of 154.52, and then target a higher high above the November 15, 2024 high of 156.74. If successful, the door would then be open for a test of the 127.2% Fibonacci extension of the October 21, 2022 - January 16, 2023 downtrend at 158.66. Such a move would most likely attract the interest of Japanese government officials, causing another round of verbal interventions.

On the flip side, the bears are keen to recapture the market reins and push USDJPY lower, towards the busy 151.94-152.34 area. This region is populated by the October 21, 2022 high, and the 50- and 200-day simple moving averages (SMAs). A break below this zone would signal that the bearish move is gaining traction. The next key support areas are likely to be the October 3, 2023 high and the 100-day SMA, at the 150.15 and 148.68 levels respectively.

To sum up, USDJPY’s rally appears to have paused, with the two central banks meetings today and tomorrow potentially proving critical for the next USDJPY leg.

AUD/USD declined below the 0.6400 and 0.6375 support levels. NZD/USD is also moving lower and might extend losses below 0.57350.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

• The Aussie Dollar started a fresh decline from well above the 0.6400 level against the US Dollar.
• There is a connecting bearish trend line forming with resistance at 0.6340 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD declined steadily from the 0.5790 resistance zone.
• There is a short-term bearish trend line forming with resistance at 0.5750 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair struggled to clear the 0.6430 zone. The Aussie Dollar started a fresh decline below the 0.6400 support against the US Dollar, as discussed in the previous analysis.

The pair even settled below 0.6375 and the 50-hour simple moving average. There was a clear move below 0.6340. A low was formed at 0.6317 and the pair is now consolidating losses. On the upside, an immediate resistance is near the 0.6340 level.

There is also a connecting bearish trend line forming with resistance at 0.6340. It is close to the 23.6% Fib retracement level of the downward move from the 0.6429 swing high to the 0.6317 low.

The next major resistance is near the 0.6375 zone or the 50% Fib retracement level of the downward move from the 0.6429 swing high to the 0.6317 low, above which the price could rise toward 0.6385. Any more gains might send the pair toward the 0.6430 resistance.

A close above the 0.6430 level could start another steady increase in the near term. The next major resistance on the AUD/USD chart could be 0.6500.

On the downside, initial support is near the 0.6320 zone. The next support sits at 0.6350. If there is a downside break below 0.6350, the pair could extend its decline. The next support could be 0.6320. Any more losses might send the pair toward the 0.6300 support.

NZD/USD Technical Analysis

On the hourly chart of NZD/USD on FXOpen, the pair also followed a similar pattern and declined from the 0.5790 zone. The New Zealand Dollar gained bearish momentum and traded below 0.5765 against the US Dollar.

The pair settled below the 0.5755 level and the 50-hour simple moving average. Finally, it tested the 0.5735 zone and is currently consolidating losses.

Immediate resistance on the upside is near the 23.6% Fib retracement level of the downward move from the 0.5792 swing high to the 0.5736 low at 0.5750. There is also a short-term bearish trend line forming with resistance at 0.5750.

The next resistance is the 0.5765 level or the 50% Fib retracement level of the downward move from the 0.5792 swing high to the 0.5736 low. If there is a move above 0.5765, the pair could rise toward 0.5790.

Any more gains might open the doors for a move toward the 0.5810 resistance zone in the coming days. On the downside, immediate support on the NZD/USD chart is near the 0.5735 level.

The next major support is near the 0.5710 zone. If there is a downside break below 0.5710, the pair could extend its decline toward the 0.5665 level. The next key support is near 0.5640.

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It’s finally Wednesday, likely the most important day of the week as we await the Fed’s decision. Expectations are for a 25-basis-point cut, but the real focus will be on the press conference and whether they deliver hawkish remarks. As you know, the US economic projections for next year are quite strong, so there may not be a need to cut rates in upcoming meetings, especially considering inflation remains well above their 2% target.

If the Fed sounds hawkish, we can expect the dollar to recover, and from an Elliott wave perspective, this seems likely after a strong rebound from 105.40, with move out of the corrective channel in five waves, so after some slowdown now ahead of the Fed, there’s a chance we’ll see continuation higher into a fifth wave. On the flip side, major currencies like the euro, Aussie, and Swiss franc could then drop.

What we should also watch closely are US yields and stocks. I think stocks could move lower, testing the downside of their recent ranges, especially the S&P 500, if Powell delivers a hawkish tone.

Daily Pivots: (S1) 194.57; (P) 195.23; (R1) 195.81; More...

Intraday bias in GBP/JPY remains on the upside for the moment. Rise from 188.07 is seen as another rising leg in the corrective pattern from 180.00. Further rally would be seen to 199.79 resistance. On the downside, break of 192.84 support will turn intraday bias back to the downside for 188.07 support instead.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.

Daily Pivots: (S1) 160.39; (P) 161.43; (R1) 162.09; More...

Intraday bias in EUR/JPY stays neutral for consolidations below 162.46 temporary top. Another rise is in favor as long as 159.09 support holds. Sideway pattern from 154.40 might still be in progress with another rising leg. Break of 162.46 will target 166.67 resistance. Nevertheless, break of 159.09 will bring retest of 156.16 instead.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). The range of consolidation should have been set between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high. However, decisive break of 152.11 would argue that deeper correction is underway.

Daily Pivots: (S1) 0.8237; (P) 0.8266; (R1) 0.8283; More...

Intraday bias in EUR/GBP stays on the downside for retesting 0.8224 support. Firm break there will resume larger down trend to 0.8201 key support. On the upside, break of 0.8326 resistance will resume the rebound to 38.2% retracement of 0.8624 to 0.8224 at 0.8377.

In the bigger picture, focus is now on whether 0.8201 key support (2022 low) is strong enough to complete the whole down trend from 0.9267 (2022 high). In any case, medium term outlook will be neutral at best until decisive break of 0.8624 key resistance. Otherwise, risk will stay on the downside even in case of strong rebound.

Daily Pivots: (S1) 1.6504; (P) 1.6542; (R1) 1.6597; More...

EUR/AUD's rally resumed and the break of 1.6598 resistance confirms that fall from 1.7180 has completed with three waves down to 1.5963. Intraday bias is back on the upside. Further rally should be seen to retest 1.7180 high. On the downside, below 1.6485 minor support will turn intraday bias neutral and bring consolidations, before staging another rise.

In the bigger picture, EUR/AUD is holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed. Deeper decline would be seen to 61.8% retracement of 1.4281 to 1.7180 at 1.5388, even as a correction.

Daily Pivots: (S1) 0.9342; (P) 0.9380; (R1) 0.9404; More....

Intraday bias in EUR/CHF is turned neutral with current retreat and some consolidations would be seen below 0.9417 temporary top. Further rally is expected as long as 0.9343 resistance turned support holds. Above 0.9417 should resume the rise from 0.9204 through 0.9444 resistance to 0.9841 fibonacci level. On the downside, sustained break of 0.9343 will argue that rebound form 0.9204 has completed and turn bias back to the downside for 0.9254 support instead.

In the bigger picture, the break of 55 D EMA (now at 0.9359) suggests that a medium term bottom might be in place already. Strong rise could be seen 38.2% retracement of 0.9928 to 0.9204 at 0.9481. Reaction from there would reveal whether rebound from 0.9204 is merely a corrective rise, or reversing the down trend from 0.9928.

Daily Pivots: (S1) 1.0469; (P) 1.0501; (R1) 1.0524; More...

Intraday bias in EUR/USD remains neutral as range trading continues. Corrective pattern from 1.0330 might extend further. But outlook will stay bearish as long as 55 D EMA (now at 1.0668) holds. On the downside, below 1.0452 will bring retest of 1.0330 low.

In the bigger picture, focus stays on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.

Daily Pivots: (S1) 1.2676; (P) 1.2703; (R1) 1.2739; More...

No change in GBP/USD's outlook and intraday bias remains neutral. On the downside, break of 1.2615 minor support will indicate that corrective recovery from 1.2486 has completed. Retest of this low should be seen next, and break will target 1.2298 cluster support zone. Nevertheless, break of 1.2810 will turn bias to upside for stronger rebound.

In the bigger picture, price actions from 1.3433 medium term are seen as correcting whole up trend from 1.0351 (2022 low). Deeper decline could be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. But strong support is expected there to bring rebound to extend the corrective pattern.