US dollar forecast – EUR/USD, USD/JPY, GBP/USD
- of USD Ending the week slightly lower, easing off multi-month highs
- US march attracts attention inflation Will report within next week
- In this article: euro/usd, USD/JPY and GBP/USD
Most read: The USD/JPY pair is trending towards a bullish break following the positive US employment report. What now?
The US dollar, as measured by the DXY index, has stalled over the past five trading sessions, ending a three-week winning streak that had pushed prices to a five-month high by Tuesday. In the end, DXY fell 0.24% to settle at 104.28. The main factor behind this move was the strong euro.
Despite this subdued performance, the dollar resumes its rise and quickly gains momentum, especially if Wednesday's March US inflation report beats expectations and confirms Wall Street's worst levels. The dollar shouldn't be devalued yet because it could recover A nightmare: Progress in eliminating inflation has hit a roadblock.
According to consensus estimates, headline CPI rose by a seasonally adjusted 0.3% last month, for an annual rate of 3.4%, up from 3.2% previously. The core index is also seen rising 0.3% month-on-month, but the 12-month reading is expected to slow to 3.7% from 3.8% in February, a positive but small step in the right direction. It has become.
sauce: DailyFX Economic Calendar
Recent fez peak
In a speech at the Stanford Business, Government, and Society Forum earlier this week, Fed Chairman Jerome Powell said the FOMC had not changed anything regarding the policy outlook set out in the latest economic outlook summary, and said the FOMC had not changed policy rates by 75 basis points (bp). ) was suggested to be maintained. Easing is still planned for the remainder of the year. His comments appeared to push the dollar lower towards the second half of the week.
Mr. Powell is the most important voice at the Fed, but other officials have begun to show reluctance to follow a preset course. For example, Federal Reserve Director Michelle Bowman said that efforts to curb inflation have stalled and that she will not be able to cut interest rates until new price pressures subside. He also said the bank could raise interest rates again, although this was unlikely.
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Dallas Fed President Laurie Logan also appears to have taken a more proactive stance, stressing that it is too early to consider easing measures. To support his view, he cited recent CPI data that were better than expected and signs that rising borrowing costs may not be suppressing aggregate demand as much as initially thought. Ta.
All things considered, if the inflation outlook continues to develop unfavorably, the US central bank may have no choice but to begin to coalesce around a more hawkish position. The strength of the labor market gives policymakers plenty of room to be patient before changing course. Take a relaxed stance. This could mean a delayed or shallow rate cut for the remainder of the year, if the rate-cutting process does eventually begin.
The following table shows the likelihood of Fed action at various FOMC meetings.
Source: CME Group
Considering the aforementioned points, traders should closely monitor upcoming inflation numbers and prepare for volatility. That said, the upside surprise in the statistics, especially in core indicators, strengthens the rise in US Treasury yields seen in the first days of April, and could see the US dollar resume its rise and assume leadership in the currency sector. may be possible.
On the other hand, lower-than-expected results for all items and core indexes could have the opposite effect on the market, leading to lower government interest rates and a weaker US dollar. However, for this scenario to play out, the final data must deviate significantly from expectations. If not, the impact on bonds and the U.S. currency would be even greater.
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EUR/USD technical analysis
EUR/USD fell to multi-week lows at the beginning of the week, but rebounded from trendline support near 1.0725, and this rebound pushed the price above both the 50-day and 200-day simple moving averages. If the pair further consolidates its recent recovery in the coming trades, Fibonacci resistance will emerge at his 1.0865 level. In terms of further strength, attention will be focused on 1.0915.
Alternatively, a pullback towards 1.0840 could occur if sellers regain control and the price falls below the major moving averages mentioned above. The bull must defend this technical floor vigorously. Failure to do so could exacerbate negative sentiment towards the euro, potentially triggering a decline towards the 1.0700 handle. Below this area, 1.0625 should be the center of attention.
EUR/USD price action chart
EUR/USD chart created using TradingView
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Technical analysis of USD/JPY
USD/JPY has been range-bound for the past two weeks, fluctuating between resistance near 152.00 and support at 150.90. This suggests that a period of consolidation is underway. With this in mind, traders should be wary of either a breakout (152.00) or a breakout (150.90) as guidance for the short-term outlook.
If a bullish breakout occurs, a rebound towards the upper bound of the short-term upward channel at 155.25 could continue if Tokyo remains on the sidelines and refrains from intervening in the currency market to support the yen. . Conversely, in case of a breakdown, sellers may start to trickle back into the market, setting the stage for a fall towards 149.75 (50-day SMA) and then 148.85.
USD/JPY price action chart
USD/JPY chart created using TradingView
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change |
long |
shorts |
OI |
every day | 6% | -17% | -Five% |
weekly | -Ten% | Four% | -Five% |
GBP/USD technical analysis
GBP/USD fell at the beginning of the week, but then rebounded in the next few days and eventually regained its 200-day SMA. However, the upward impulse disappeared when the price failed to clear the cluster resistance at 1.2670 near the intersection of three important trend lines. Traders should keep a close eye on this area, keeping in mind that a bearish rejection could push the cable back towards 1.2590 and even 1.2520.
On the other hand, if the bulls succeed in pushing the exchange rate above 1.2670 in a decisive manner, buying interest will accelerate in future sessions, fostering conditions for a possible rally towards the 1.2800 handle. there is a possibility. Further gains beyond this milestone could open the door to retesting last month's highs near 1.2895.
GBP/USD Price Action Chart
GBP/USD chart created using TradingView