Dollar Dominance: Charting the Path of EUR/USD, USD/JPY, GBP/USD

The US dollar strengthens against major currencies, and technical setups suggest potential moves on EUR/USD, USD/JPY, and GBP/USD.

The US dollar (USD) stands ready for a potential resurgence against significant currency counterparts, with setups emerging on key pairs such as EUR/USD, USD/JPY, and GBP/USD. Market sentiment analysis suggests a dynamic shift favoring the greenback, driven by various fundamental and technical factors.

EUR/USD Forecast – Technical Analysis

The EUR/USD pair started the week downward, breaching support at 1.0635 and reaching its lowest level since November of the previous year. The decline, amounting to over 2.4% from April’s peak, signals the potential for further losses, potentially targeting the 2023 lows at 1.0450 if the market confirms the current breakdown in the coming sessions.

However, a reversal scenario could materialize if the EUR/USD reclaims the 1.0635 support level. In such a scenario, traders anticipate resistance around the psychological barrier at 1.0700, with further upside potential towards 1.0725. Bears must vigorously defend this technical ceiling to prevent a rally toward the 50-day and 200-day simple moving averages near 1.0820.

Dollar Dominance: Charting the Path of EUR/USD, USD/JPY, GBP/USD

USD/JPY Forecast – Technical Analysis

The USD/JPY pair witnessed a robust rally on Monday, surging past the 152.00 mark and reaching its highest level since June 1990. Rising U.S. Treasury yields fueled this upward momentum, with further upside potential possibly targeting channel resistance at 155.80. However, a decisive break above the 155.00 threshold might prompt intervention from the Japanese government to support the yen.

Conversely, profit-taking by bullish investors could lead to a pullback, finding support initially at 153.20 and subsequently at 152.00. Further downside momentum might see stabilization around the 50-day simple moving average at 150.80, with a potential breach opening the door towards 150.50.

GBP/USD Forecast – Technical Analysis

The GBP/USD pair experienced a minor decline but held above the support level at 1.2435. Maintaining this technical floor is crucial for bolstering sentiment towards the pound; failure to do so might trigger a pullback towards 1.2325 and potentially towards the October 2023 lows around 1.2040.

On the upside, a bullish reversal could occur if sentiment shifts in favor of buyers, with primary resistance seen at 1.2525. Above this level, attention will be drawn to the 200-day simple moving average at 1.2580, followed by 1.2650, where the 50-day simple moving average intersects with key short-term trendlines.

In summary, the US dollar’s outlook appears to be brightening against major currency pairs, with technical setups suggesting potential moves on EUR/USD, USD/JPY, and GBP/USD. However, market dynamics remain fluid, and traders should closely monitor developments to navigate these volatile currency markets effectively.

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