US dollar forecast – EUR/USD, GBP/USD, USD/JPY
- USD Sales slow down on Monday ahead of a high-impact event later in the week
- core PCE Data and Powell’s speech on Friday will be the focus of attention.
- In this article: euro/usd, GBP/USD and USD/JPY
Most read: USD Forecast: PCE data steals the show.Settings for EUR/USD, USD/JPY, and GBP/USD
The dollar fell slightly on Monday, but the losses were modest and likely contained by rising U.S. Treasury yields. While many traders decided to take profits after last week’s strong performance in the US dollar, others are looking ahead to the next few days, including the release of core PCE data and Chairman Powell’s speech (both on Friday). In anticipation of events, I avoided taking any major directional positions.
Upcoming major events in the US economic calendar
sauce: DailyFX Economic Calendar
Shifting our focus from fundamentals to technical analysis, the next section of this article examines the market sentiment and price movement dynamics of three major USD pairs: EUR/USD, GBP/USD, and USD/JPY. This segment identifies key levels of support and resistance that are essential for effective risk management when building positions.
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EUR/USD Forecast – Technical Analysis
EUR/USD rose on Monday after rebounding from the technical support located around the 1.0800 area, with the price approaching the confluence resistance at 1.0835-1.0850. The bull must resolutely defend this barrier. A stall could pave the way for 1.0890 and then 1.0925.
Conversely, if the sellers regain the upper hand and cause a pullback, support will appear at 1.0800 as mentioned above. Maintaining this lower bound is essential to prevent euro sentiment from deteriorating. A break above this could lead to a further significant drop towards 1.0725.
EUR/USD price action chart
EUR/USD chart created using TradingView
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GBP/USD Forecast – Technical Analysis
After enduring a tough sell-off last week, GBP/USD regained stability on Monday, with cable encountering support at the 200-day SMA near 1.2600 and regaining lost ground. If the pullback strengthens in the coming days, further resistance levels are likely at 1.2675, 1.2700, and 1.2830.
Conversely, if the market mood returns in favor of selling and the exchange rate resumes its decline, psychological support will be realized at the 1.2600 mark. Further losses below this technical zone could prompt a sharp decline towards 1.2510.
GBP/USD Price Action Chart
GBP/USD chart created using TradingView
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USD/JPY Forecast – Technical Analysis
After surging last week, USD/JPY showed no clear direction on Monday, hovering just below last year’s high of 152.00. If this barrier is breached, it could prompt Japanese authorities to intervene to support the yen, potentially limiting the duration of the breakout. Nevertheless, absent currency intervention, a rise above 152.00 could set the stage for a push towards 154.40.
Alternatively, if the bears wrest control from the bulls and initiate a reversal, support could be found at 150.90 followed by 149.75. The pair could stabilize around these levels on a retest, but if a breakdown occurs, it could fall towards the 50-day simple moving average at 148.90.
