23 January 2023 USD heads lower| FXMAG.COM

USDJPY struggles to rebound
The US dollar edges lower due to bearish inertia across the board. On the daily chart, the pair is still hovering above last May’s lows of 126.50 as the bulls strive to keep the outlook rosy in the medium-term. The price action has stabilised above 127.80 with the latest bounce above 128.90 suggesting an improved mood. Still, the bulls will need to clear the faded peak at 131.50 before they could regain the upper hand. Otherwise, a drop below 128.30 could make the greenback walk on thin ice above 126.50.

EURGBP licks wounds
Sterling fell back over weak retail sales in December. A sharp fall below the previous swing low at 0.8770 has put the bulls on the defensive. The single currency is resting on 0.8720 at the base of the bullish breakout in late December. Sentiment has grown cautious and the sideways action may end soon in a breakout. A hold above this critical floor would challenge 0.8800 where a breakout could help the pair recover to 0.8880. Failing that, a bearish turn would trigger a new round of sell-off and send the pair to 0.8650.

GER 40 holds on to gains
The Dax 40 recouped losses as investors saw a bargain hunting opportunity. On the daily chart, the RSI’s double top in the overbought area suggests overextension after the index recovered to a 11-month high. A break below 15100 then the psychological level of 15000 has prompted complacent buyers to look for the exit. The bounce may come under pressure at 15130 and only a close above 15250 would resume the uptrend. 14950 is a fresh support and 14800 further down is the next level to gauge buyers’ interest.

Jing Ren

Jing-Ren has extensive experience in currency and commodities trading. He began his career in metal sales and trading at Societe Generale in London. Later on he worked as a senior analyst within the FX brokerage industry where he developed strategies in trading and risk management. With solid understanding of market dynamics he founded Wensfer to offer research and asset management services.