Major Pairs Trending
All of the majors are in clear trends. Depending on the major pair, the trend has been ongoing for 1-3 months. The trend has been very strong and has been based on the strengthening US dollar. Since the beginning of this month, each of the trends has had a bit of a hiccup where the trend weakened and in some instances raised the question if the trends were coming to an end.
After a period over the last week and a half where we saw a counter trend, we are now at a point where the trend is now looking like a return to the trends that have been ongoing for the last month or more. In each pair, the beginning of the month saw the 9 exponential moving averages flatten. The 18 exponential moving averages however held their trends. We did not see the crossing of the moving averages, which would clearly signal the end of the trend. There has been a bit of consolidation occurring during this period. However, after the counter trend high or low was reached, we have been pulling away from that point and the 9 moving averages have returned to their trend.
This has been the case for each major pair except one. The USDJPY is the only major where the moving averages crossed. The counter trend is strengthening. If we look at the Fibonacci retracements, the USDJPY has done a 38% retracement from its high at the beginning of the month. The question now is whether the retracement is over and does this return to an uptrend or is there room for a greater retracement. Look for a break below the lows on the 14th for further retracement or a break above the 23% retracement level for the trend to return to the upward trend.
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