Technical analysis by forex traders.

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June-21, 2022, daily currency pairs analysis and forex market forecast, by forex forum.​

US Dollar Index Price Analysis: Next on the downside comes 103.41

DXY adds to the negative start of the week and briefly visits the area below the 104.00 support on Tuesday.

Considering the ongoing price action, further correction should not be ruled out in the short-term time frame. That said, another visit to the post-FOMC low at 103.41 (June 16) is expected to remain on the cards in the near term ahead of the interim 55-day SMA at 102.53.

As long as the 4-month line around 101.85 holds the downside, the near-term outlook for the index should remain constructive.

Looking at the longer run, the outlook for the dollar is seen bullish while above the 200-day SMA at 97.67.

EUR/USD​

EUR/USD extends the buying bias for the second session in a row and climbs to the 1.0580/85 band on Tuesday.

If bulls push harder, then the pair could attempt a move to the minor hurdle at the June 16 high at 1.0601. Beyond this level comes the 55-day SMA at 1.0642 prior to the 4-month line around 1.0700. Spot needs to clear the latter to mitigate the selling pressure and allow for the continuation of the recovery in the short-term horizon.

In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.1155.

JPY/USD

The Japanese yen plunged on Tuesday to the lowest levels versus the U.S. dollar since October 1998, as the Bank of Japan's ultra-loose monetary policy stance continued to weigh.

The yen dropped 0.9% to a new 24-year low of 136.330 per dollar, extending losses which have already seen it shed more than 18% of its value versus the greenback this year.

The yen's decline was also accelerated by some stop losses broken around the 135.60 levels, according to analysts, who noted New York traders had been absent on Monday, a U.S. public holiday.

Technical Outlook:

USD/JPY clawed back some losses at the end of last week – a week which saw a surprise 50 bps hike from the Swiss National Bank (SNB), an aggressive 75 bps hike from the fed with more to come depending on data, and confusion out of the ECB regarding its anti-fragmentation tool for the bond market.

However, a solid rejection ahead of the 131.35 level set the scene for another advance in USD/JPY, rising above prior levels with ease. Today, the pair has traded above last week’s high of 135.60, fast approaching 136 flat. Nearest resistance now lies at the October 1998 level of 136.89 followed by 139.26 (May 1998). Support appears at 135 flat, 133.20 and 131.35.


USD/CAD

The USDCAD is modestly lower today after peaking near the May 2022 high on Friday (highest level since November 2020). The price action today has seen a continuation of the move lower. The pair has moved below the swing high from last Wednesday and the down to a swing area between 1.29700 and 1.29798. Below that sits, the rising 100 hour MA at 1.29606.

The low today has reached 1.2978. The current price is at 1.2990.

AUD/USD

The Australian dollar (AUD/USD) gained ground as well, up by 0.2%, boosted by Reserve Bank of Australia Governor Philip Lowe's remarks that additional tightening is needed because rates are still low and inflation is expected to reach 7% by year's end. The New Zealand dollar (NZD/USD) mirrored the Aussie's performance (+0.2% today).

The AUD/USD daily chart formed a double bottom around 0.685 last week, a level reached by the pair in mid-May before rebounding to 0.727.

AUD/USD is now trading at 0.699, up by 1.3% over the past week.

GBP/USD​

On the other hand, The British Pound is moving gently higher in early trade despite a raft of negatives hanging over GBP. Wednesday’s inflation release is expected to show headline inflation y/y (May) touch 9.1%, a fresh four-decade high, with some market commentators seeing an even higher print.

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June-22, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The dollar eased against the euro and yen on Wednesday as concerns mounted that interest rate hikes by major central banks to contain inflation run the risk of inducing a sharp global slowdown or recession.

British consumer price inflation hit a new 40-year high at 9.1% in May, while annual Canadian inflation surged to 7.7% last month to the highest rate since January 1983, in the latest data to show consumer prices running hotter than expected.

Sterling initially lost almost 1% as it fell to a near one-week low of $1.2162, but it later pared losses. The Canadian dollar slid against the U.S. currency, but it remained below the 1.30 level it breeched last Friday and on Monday.

The dollar index fell 0.201%, with the euro up 0.32% to $1.0559. The Japanese yen strengthened 0.53% to 135.89 per dollar, while sterling was last 0.06% lower at $1.2265.

EUR/USD​

The shared currency extends its gains in the week, advances for the third straight day, up by 0.45%, amidst a mixed market mood surrounding the financial markets. At the time of writing, the EUR/USD is trading at 1.0576.

EUR/USD Price Forecast: Technical outlook

In the last seven days, the EUR/USD has advanced steadily in six, though the negative day was absorbed by June’s 20 and 21 price action. EUR/USD traders should note that the Relative Strength Index (RSI) at 49.45 is aiming higher after breaking above the RSI’s 7-day SMA, suggesting some buying pressure is mounting on the pair.

Therefore, the EUR/USD is upward biased in the near term. That said, the EUR/USD first resistance would be the 1.0600 figure. A breach of the latter would expose the June 10 daily high at 1.0642, closely followed by the 1.0700 mark.


GBP/USD

It was an even more painful quarter for GBP as the Euro has out-performed the British Pound in Q2, which can be witnessed by the breakout in EUR/GBP.

But, to be sure, the Bank of England will be dealing with a similar issue as the ECB with inflation expected to continue climbing there. In the U.K., the BoE has been up-front about their expectations which include the possibility of recession as inflation climbs above 10% later this summer. The difference, however, is that the BoE has already started the process of hiking rates.

Technical outlook

In GBP/USD, the pair crossed a big level last week at 1.2000. A strong pullback developed shortly after, and there may be a bit more room for that theme to work, with possible resistance in the 1.2452-1.2500 area on the chart. If that doesn’t hold, there’s another spot of prior support/resistance overhead, plotted around the 1.2650 area on the chart.

AUD/USD

The AUDUSD has seen a bounce higher after a run lower in the Asian and early European session. The move lower did extend below a large-ish swing area between 0.68916 and 0.69168. However, the low could not reach a lower swing target near 0.6870.

The move back to the upside, helped by Powell comments, has pushed the pair to another swing area between 0.6949 and 0.6962. Just above that level is falling 100/200 hour MA at 0.6965.

USD/JPY​

Analysts at MUFG Bank, hold a bullish bias for the USD/JPY pair, reflecting the fact that the US rates market is unlikely to correct dramatically lower over the very short term. They see the pair trading between 130.00 and 138.50 during the weeks ahead.

Moreover, The main downside risk for USD/JPY in the month ahead would be if the scale of JPY weakness finally triggers a joint policy response from the government and BoJ. But the scale of JGB buying by the BoJ last week suggests action to limit yen weakness is unlikely over the short-term. A sharper correction in US rates lower is another key downside risk and while we expect that to materialize later, it is premature to expect that over the short-term with the primary focus of the Fed still on tackling upside inflation risks.

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[Forex Forum]

June-23, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The GBP/USD pair is trading in the red at 1.2232 at the time of writing. In the short term, the pair moves sideways, so we'll have to wait for the pair to escape from this range before going long or short. The price seems undecided as the Dollar Index moved sideways in the short term.

The pair continues to stay in a neutral zone as the US data came in worse than expected earlier. The Flash Services PMI came in at 51.6 points versus 53.4 points in the previous reporting period, even if the specialists expected a potential growth up to 53.9 points.

Furthermore, the Flash Manufacturing PMI was reported at 52.4 points below 56.0 estimated, while the Unemployment Claims dropped from 231K to 229K failing to reach the 227K forecasts. On the other hand, the UK inflation data came in mixed. The Flash Services PMI came in better than expected signaling further expansion, while the Flash Manufacturing PMI reported worse than expected data.

USD/JPY

The Japanese yen is in positive territory today, extending its gains from yesterday. USD/JPY is trading at 135.46 in the European session, down 0.56% on the day.

Yen Rises As U.S. Yields Dip

The yen has gained a bit of strength as USD/JPY is back below 136.00, after rising close to 136.71 earlier in the week, its highest level since September 1998. The yen received a reprieve from its recent slide due to a drop yesterday in U.S. Treasury yields, rather than any newfound strength related to the yen. This is another indication that USD/JPY movement is at the mercy of the U.S./Japan rate differential, with the Bank of Japan holding firm on its yield cap for JGBs.

USD/JPY Technical

There is resistance at 1.3657 and 1.3814
USD/JPY has support at 1.3404 and 1.3247


EUR/USD

The EUR/USD slides for the first day in the week, down by 0.30%, courtesy of a mixed market mood and dismal S&P Global PMIs figures on the Euro area reported in the European session, which tumbled the EUR/USD from daily highs around 1.0580s to daily lows near 1.0482. At 1.0509, the EUR/USD prints losses and is ready to continue its path towards the 1.0500 figure.

Elsewhere, the US Dollar Index, a gauge of the buck’s value against its peers, pops up 0.25% sitting at 104.445, while US Treasury yields, fall, reflecting investors are reassessing not as aggressive as expected Fed tightening, as the US S&P Global PMIs crossed wires.

USD/CAD​

Analysts at CIBC see the USD/CAD pair trading around 1.29 during the third quarter and rising toward 1.31 by year-end. They consider markets are overpricing tightening this year from the Bank of Canada and the Federal Reserve.

“A likely 75 bp hike by the Bank of Canada in July, and the potential for another move of that magnitude in September if we don't see enough of an inflation deceleration by then, should be aggressive enough to allow USDCAD to remain around current levels over the next three months.”

“Contrary to market expectations, the BoC is unlikely to send Canada's overnight rate beyond the Fed's destination of 3.25%. Canada’s debtburdened households and mortgage renewals will see rate hikes weigh more on discretionary consumer spending in Canada. That points to a slightly lower terminal rate for the BoC overnight rate, although we're leaning towards a 3% peak rather than our prior 2.75% after the May inflation data.”

NZD/USD​

On the other hand, The NZD/USD pair has been suppressed for a while now but approaches a rather key level of support (0.6200) once again. This presents an interesting dilemma of a possible bounce of breakdown. Chartists will tell you that the more frequently a level is tested and respected, the more likely it is to eventually give way. Thus far, the pair has approached 0.6200 and the 61.8% Fib of the March 2020 major move without continued downside momentum.

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[Forex Forum]

June-27, 2022, Daily currency trading analysis and forex market forecast, by forex forum.​

The British pound remains to trade in a narrow range vs. the greenback, though it stays trading with minimal gains after probing the 1.2300 mark reaching daily highs at 1.2313, followed by a dip towards daily lows near 1.2238. At 1.2277, the GBP/USD is up 0.05% in the North American session.

GBP/USD Price Forecast: Technical outlook

Consolidation is what the GBP/USD daily chart shows, within the 1.2150-1.2300 area, though it is skewed to the downside. Confirmation of the previously mentioned is the exponential moving averages (EMAs), above the exchange rate, while the Relative Strength Index (RSI) at 44.97, remains in bearish territory.

If GBP/USD buyers need to regain control, they must reclaim 1.2500. Nevertheless, on its way north, they would face resistance at the 1.2300 mark. Once cleared, the 50-EMA at 1.2353 would be the next ñeveñ to challenge, followed by June’s 16 high at 1.2405, and then the 100-EMAR at 1.2463.

EUR/USD

On the other hand, The EUR/USD rose further during the American session and climbed to 1.0614, reaching the highest level in two weeks. The euro pulled back under 1.0600. It is holding onto daily gains, still unable to consolidate above 1.0600.

The improvement in risk sentiment weakened the greenback. The DXY is falling 0.25% on Monday, trading at 103.85. US bond yields are modestly higher but European yields rose even further. The German 10-year yield jumped 7% to 1.54%. The divergence helped EUR/USD move higher.

Bullish short-term outlook

The EUR/USD is trading above 1.0580, but is showing difficulties running above 1.0600. The euro is back above the 20-day Simple Moving Average (1.0588). A daily close above 1.0600 should strengthen the recovery. The 55-day SMA awaits at 1.0620.

A decline under 1.0580 would alleviate the bullish pressure. The next support might be located at 1.0530 followed by 1.0490.

US Dollar​

U.S. Durable Goods Orders (May) –ACT: 0.7%, EST: 0%; CORE – ACT: 0.7%, EST: 0.3%

Durable goods orders are used as a barometer for the U.S. economy by measuring industrial activity. This economic indicator represents new order data from U.S. manufacturers for higher value goods that are said to last over three years. Increasing durable goods numbers are often thought of as positives for the U.S. economy and thus the dollar by way of investors’ confidence.

TECHNICAL ANALYSIS

Post-announcement, the DXY was bid finding sustenance from bulls and overshadowing the recent recessionary talk in the U.S.. Price action is currently testing resistance at the 50-day EMA (purple) while the days long lower wick may point to impending upside near-term.

Resistance levels:
105.00

Support levels:
20-day EMA (purple)
50-day EMA (blue)
Trendline support (black)

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AUD/USD

The AUD/USD seesaws from daily highs around 0.6958 printed during the Asian session and dipped towards daily lows near 0.6910, in a narrow trading range that witnessed the Aussie dollar losing some ground vs. the greenback. At 0.6944, the AUD/USD trades above the middle of the aforementioned 0.6910-0.6960 region during the North American session.

AUD/USD Price Forecast: Technical outlook

In the daily chart, the Aussie dollar is still headed to the downside as the week begins. If AUD/USD buyers would like to regain control, they need to reclaim 0.7000 to ease the ongoing selling pressure on the pair. If that is achieved, AUD buyers’ next target would be the 20-EMA at 0.7047, immediately followed by the 50-EMA at 0.7078.

On the flip side, and the AUD/USD path of least resistance, the first support would be 0.6900. A breach below would expose June 23 low at 0.6869, followed by the June 14 swing low at 0.6850.

USD/CAD​

USD/CAD fell 21 pips to 1.2875 as the rebound in oil prices continued. The US dollar was mixed as high yields and good economic data competed with end-of-month flows into some beaten-down currencies.

The main feature on the USD/CAD chat is the double top at 1.3077/79. The declines in the past two days emphasize that as a key point of resistance and a potential top.

USD/JPY

Elsewhere, Japan has seen inflation move higher, although nowhere near the levels in the US or the UK, which are not far from double-digits. Last week, core CPI for May came in at 2.1% YoY, unchanged from April. This was the second straight month that core CPI remained above the BoJ’s target of 2%. This is a dramatic shift, given that Japan struggled with deflation for decades. The driver behind rising inflation is higher food and energy prices, as well as the plummeting yen. Notably, wages have not risen.

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June-28, 2022, Daily latest currency pairs analysis and forex market forecast, by forex forum.​

The US Dollar has spent much of the past two weeks pulling back, with the FOMC rate decision in the middle of June as the defining line. While the Fed didn’t necessarily say anything dovish there, the USD hasn’t yet been unable to take out or even test the high that was set just as the FOMC statement was released.

That pullback had taken on a somewhat orderly fashion, with a series of lower-highs to go along with horizontal support at 103.82. That price was the high in 2017 and it held as the five-year-high until it began to be tested in April, eventually giving way to bullish pressure in the month of May.

EUR/USD

On the other hand, A key push-point for this theme in the USD has been EUR/USD. Going along with that descending triangle in the US Dollar, EUR/USD had built the mirror image formation with an ascending triangle. Resistance was from the same 1.0593-1.0638 zone that’s been in-play as resistance in May and then support in early-June. That zone has seen three separate resistance tests since mid-June with bulls making slightly higher-highs each time.

If sellers can pose a breach, follow-through support exists around 1.0450 and then 1.0357. If bulls can hold the low while forcing a late-quarter turn-around, next resistance beyond 1.0593 is the 1.0638 level, followed by a spot at 1.0695 and after that, the bigger zone of resistance running from 1.0767-1.0787.

USD/JPY

The USD/JPY pair built on its steady intraday ascent through the early North American session and shot to a fresh three-day high, around the 136.30 region in the last hour.

The intraday bullish momentum, also marking the third successive day of a positive move, could further be attributed to some technical buying above the 136.00 round-figure mark. This, in turn, might have already set the stage for an extension of the upward trajectory, back towards retesting a 24-year high, around the 136.70 region touched last week.

Moving ahead, the market focus now shifts to Fed Chair Jerome Powell's appearance on Wednesday. Market participants will look for clues about the US central bank's policy tightening path. This will play a key role in influencing the near-term USD price dynamics and help investors to determine the next leg of a directional move for the USD/JPY pair.

Russian Ruble​

The rouble rallied past 52 against the dollar to a more than a seven-year high on Tuesday as capital controls and month-end taxes offset the negative impact of Western statements that Russia has defaulted on its international bonds.

The rouble hit 50.6125 against the dollar in Moscow trade for the first time since late May 2015, and jumped to 54.40 against the euro, a level last seen in April 2015.

As of 1523 GMT, the rouble gained nearly 3% to 51.88 against the greenback and was at 54.71 against the euro, gaining more than 2.5% on the day.

Market players "see the current levels as attractive for purchasing hard currency, especially in light of the recent comments from Russian officials indicating that the rouble has become too strong," Sberbank CIB said in a note.

On the stock market, the dollar-denominated RTS index rose 2.5% to 1,464.1 points. The rouble-based MOEX Russian index was 0.3% lower at 2,409.1 points.


EUR/GBP

The pound may not receive a lasting support from the Bank of England, even if it accelerates rate hikes, as investors override concerns about UK investment and growth, explain analysts at Rabobank.

The BoE was quicker out of the blocks on policy tightening than many other G10 central banks this cycle. However, the five interest rate hikes announced by the BoE already have not prevented the pound from being one of the poorest performing G10 currencies in the year to date. A step up in the pace of BoE rate hikes, may not provide the pound with much lasting support given investors overriding concerns about UK investment and growth. We see scope for EUR/GBP to end the year around 0.88.

USD/CAD​

Elsewhere, USD/CAD fell 21 pips to 1.2875 as the rebound in oil prices continued. The US dollar was mixed as high yields and good economic data competed with end-of-month flows into some beaten-down currencies.

The main feature on the USD/CAD chat is the double top at 1.3077/79. The declines in the past two days emphasize that as a key point of resistance and a potential top.

The next hurdle to cross will be the June 16 low of 1.2861, which is about a dozen pips away but has held on a handful of pushes lower today. If that gives out, the 55-day moving average clocks in at 1.2783.

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[Forex Forum]

June-29, 2022, Daily latest currency trading analysis and market forecast, by forex forum.​

The GBP/USD pair added to the previous day's heavy losses and remained under intense selling pressure for the second successive day on Wednesday. The downward trajectory picked up pace during the early North American session and dragged spot prices to the 1.2100 neighborhood, or a nearly two-week low.

The US dollar attracted some buying in reaction to hawkish remarks by Fed Chair Jerome Powell and shot to its highest level since June 17. This, in turn, exerted downward pressure on the GBP/USD pair.

Apart from this, sliding US Treasury bond yields, along with a generally positive tone around the US equity markets, might cap gains for the safe-haven USD and limit deeper losses for the GBP/USD pair. That said, sustained weakness below the 1.2100 round-figure mark would be seen as a fresh trigger for bearish traders and set the stage for a further depreciating move.

EUR/USD

The euro gave back earlier gains on Wednesday after European Central Bank President Christine Lagarde said the era of ultra low inflation that preceded the pandemic is unlikely to return.

The euro was last down 0.41% to $1.0475. It had dropped to as low as $1.0486 earlier in the day after data showed June prices in the German state of North Rhine–Westphalia (NRW) had been 0.1% lower than in May, but had recovered after a high readout of Spanish inflation data.

Moreover, The dollar index, which measures the greenback against six counterparts, ticked up 0.412% to 104.880 with investors seeking safety in U.S. assets as stocks declined globally due to the mounting risk of a recession. The dollar index stayed, however, below the two-decade high of 105.79 struck two weeks ago.

US Dollar​

The U.S. dollar, as measured by the DXY index, rose as much as 0.45% to 104.95 on Wednesday after the Federal Reserve chairman offered hawkish remarks at the ECB summit held in Sintra, Portugal. During a panel that also included Christine Lagarde and Andrew Bailey, Jerome Powell reiterated in no uncertain terms that the Fed is committed to using its tools to bring inflation down to 2% and that it will not allow the economy to move to a highly inflationary environment.


US DOLLAR TECHNICAL ANALYSIS

After encountering support in the 103.80 area earlier this week, the U.S. dollar (DXY) has gathered strength to rebound over the past two sessions, advancing towards key resistance at the 2022 highs near 105.75. If bulls manage to push the index above this barrier in the coming sessions, bullish momentum could accelerate, setting the stage for a rally towards 106.60.

On the other hand, if sellers regain control of the market and prices reverse lower, initial support rests at 103.80/103.60. If we see a drop below this technical floor, the focus shifts to trendline support near 102.50.

USD/JPY

USDJPY managed to gain fresh buying traction around the resistance-turned-support area of 134.42 last week, with the price currently looking to extend its broad uptrend above the 20-year high of 136.70.

Although the clear positive slope in the simple moving averages (SMAs) is still backing the bullish direction in the market, the momentum indicators warrant some caution over the strength in the market.

Should the bulls snap the top of 136.70, the next obstacle could be the 261.8% Fibonacci extension of the 131.34 – 126.35 downleg at 139.15, while the broken support line could immediately cap the rally near 140.70, preventing a spike towards the tentative resistance line seen around 143.53.

EUR/CHF

On the other hand, The euro is struggling on all fronts today but technically, EUR/CHF is the most interesting.

The pair is down 90 pips today to 0.9974. That's just above the March low of 0.9970. Beyond that we have to go back to the depths of the rug-pull from the Swiss National Bank in 2015.

Given the SNB's propensity to intervene, this isn't a real market so I wouldn't put too much weight on the technicals.

XAU/USD​

Elsewhere, Gold prices dropped sharply during the American session, erasing daily gains. XAU/USD peaked at $1833, the highest level in two days and then turned lower, falling to $1814, slightly above the daily low of $1811.

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June-30, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The USD/JPY slides on Thursday, following a lower-than-expected inflation report, which could deter the US Federal Reserve from tightening at a faster pace amidst odds increasing of recession, keeping investors uneasy. At 135.85, the USD/JPY retreats from daily highs shy of 137.00, back below the 136.00 mark.

Besides that, fears of a recession as global growth stagnated, alongside high inflation, spurred a flight to safe-haven. Particularly in the USD/JPY, the yen remains bid, boosted by the fall in US Treasury yields, weighed by falling US inflation expectations, as illustrated by the five and 10-year break-even inflation rates, easing from YTD highs around 3.59% and 3.02% each, down to 2.59% and 2.36%, respectively.

EUR/USD NEARS MAJOR SUPPORT​

On the other hand, The US Dollar is trading at a fresh 19-year high. USD/JPY is at a fresh 24-year high. EUR/USD, as yet, hasn’t been able to punch below its own 19-year-low.

It’s come close: That low is at 1.0340 and was set in 2017. In May, EUR/USD was hurdling-lower, but pulled up just short of that level at 1.0349. And then again, in June, the pair was punching-lower and a higher-low developed, this time at 1.0359.

At that point I started to look for a pullback in the move but that was cut short, with sellers coming in at the same resistance that’s held the highs for the past couple of weeks at 1.0593.

Sellers are making another attempt at support and so far, that attempt has fallen short. But, this carries breakdown potential into Q3 and the fundamental side is a major driver that doesn’t look to let up anytime soon.

At this point, resistance potential remains at the 1.0500 psychological level.

EUR/JPY

EUR/JPY is currently at 141.58 and in a channel. We have convergence to the downside. If we can break this support, we are looking for a continuation towards the ATR target at the 140.77 area and then the S5 at the 140.47 area.

Watch the DXY for any change in direction. The ATR for the pair currently is 187 pips per day, and its 180-day average is 160 pips per day. DXY is currently up at the time of this post.

GBP/USD​

Economists at TD Securities expect the GBP/USD pair to continue its downfall. Although the Bank of England (BoE) could offer some support the market is too aggresive in its pricing and cable is likely to break under 1.20 in the near-term.

GBP vulnerable on the crosses
“The near-term GBP trajectory is biased to the downside, even though it maintains a pretty hefty discount.”

“The BoE plus fiscal support may help to put a floor in cable but not before a near-term break below 1.20. Still, BoE pricing seems too aggressive relative to our forecast, leaving GBP vulnerable on the crosses.”

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[Forex Forum]

July-01, 2022, Daily latest forex trading analysis and currency exchange forecast, by forex forum.​

The Dollar performed exceptionally well through the first half of 2022 – and more broadly over the preceding year. The fundamental stars aligned between a leading Fed tightening regime, perceptions of a greater cushion for the US economy amid forecasts of a global slowdown and the reliability of the currency’s renowned safe haven status. All of these elements are still in play heading into the second half of the year, but the relative potential has deflated.

The underwhelming follows through for the Greenback despite the Fed’s 75 basis point hike in June or during the S&P 500’s steep selloff in the first half of the same month likely indicates the limitations in support of the Dollar for the different dimensions. Can the benchmark currency extend its incredible rally into territory not charted in two decades or is it finding a peak?

USD/CHF

The USD/CHF accelerates and reclaims the 0.9600 figure after harmful US economic data, showing that the economy, although expanding, is doing it at a slower pace than estimated amidst a US Federal Reserve tightening cycle. At the time of writing, the USD/CHF is trading at 0.9624.

US equities are falling, preparing to finish the week with substantial losses. Meanwhile, US Treasury yields have recovered some ground, while the greenback remains in the driver’s seat, as shown by the US Dollar index, up 0.58%, at 105.340.

EUR/USD

EUR/USD bulls got a strong reversal bar following the June 13 bear close test and the June 15 low.
Yesterday was also the third reversal up from the 2017 low since May, which increases the probability of the market getting a rally here.
Bulls see yesterday as a signal bar for a higher low double bottom major trend reversal with June 15.
Bulls hope that the market will break above the neckline (June 27 high) and get a measured move up to 1.0871, which is about the June high.


Bears want the opposite and a breakout below the 2017 low. While it is possible, even if the market does fall below the 2017 low, there will probably be buyers, and the market will create a failed breakout of a double bottom.

Today is Friday, so the weekly chart is important.
Bulls want the market to close above last week’s low of 1.0469. Next, bulls would wish to close above the midpoint of the current week (1.0502).
Bears want the opposite of the bulls and for this week to close below last week’s low and create as small a tail below this week’s bar as possible.

GBP/USD​

According to analysts from Rabobank, if the Bank of England (BoE) do not keep step with the hawkish guidance of the Federal Reserve (Fed) there is a risk that the pound could weaken further. They see the risk of dips in the GBP/USD pair to 1.18 on a three-month view.

“If expectations regarding BoE policy moves do not keep step with the hawkish guidance of the Federal Reserve, it can be argued there is a risk that GBP could weaken further. Yet, GBP is also proving sensitive to fears regarding growth. We see risk of dips to GBP/USD 1.18 on a 3 month view. We expect EUR/GBP to end the year at 0.88.

“The BoE was out of the traps much earlier than either the Fed or the ECB in terms of policy tightening. However, this has failed to give the pound much of a lift, with GBP one of the poorer performing G10 currencies in the year to date. In our view, the inability of GBP to benefit substantially from the BoE’s early rate hiking cycle is due to the market’s focus on the poor growth outlook for the UK.”

EUR/JPY

Concerning EUR/JPY’s daily highs and lows, it’s 1.062% down from its trailing 24 hours low of $142.15 and 1.174% down from its trailing 24 hours high of $142.31.

EUR/JPY’s yearly highs and lows, it’s 13.046% up from its 52-week low and 2.482% down from its 52-week high.

Volatility

EUR/JPY’s last week, last month’s, and last quarter’s current intraday variation average was 0.08%, 0.16%, and 0.57%, respectively.

EUR/JPY’s highest amplitude of average volatility was 0.34% (last week), 0.70% (last month), and 0.57% (last quarter), respectively.

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July-04, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

With the little in the way of market moving events over the weekend, global market including the euro has been left at the mercy of market sentiment. The situation in Ukraine and decisions by Russia could weigh negatively on the Eurozone should energy flows into the region be cut. The economic calendar is similarly light this week (see below) giving precedence to recessionary fears leading up to Wednesday’s commencement of high impact events.

This being said, the mornings news helped bolster euro bets after hawkish comments from Deutsche Bank’s CEO around hiking rates quicker than expected while talks around the anti-fragmentation tool is primed to be the talk of the town over the next few weeks. Should the ECB manage to clarify or agree on a path forward regarding ‘anti-fragmentation’, this could be extremely bullish for the euro.

Technical outlook of EUR/USD

Price action on the daily EUR/USD chart shows bulls once again defending the key area of support around the 1.0340 (January 2017 swing low). This key inflection point could mark the start of a extended move lower with the formation of the recent descending triangle pattern which will require a confirmation break below support. A rejection would thus occur if we see a breakout above triangle resistance coinciding with the 1.0601 swing high.

GBP/USD

On the other hand, GBP/USD held above 1.2100 around 1.2114 on Monday with the US dollar struggling to find demand amid a risk-positive market environment. The US dollar index remained in negative territory below 105.00 and the UK's FTSE 100 stock index was up more than 1%.

The US dollar index was pressured below 105.00 after the appearance of poor PMI data from the ISM. Poor numbers released by the US Institute of Supply Management (ISM) have raised the possibility of an economic recession in the United States. The US ISM conveys the vulnerability of the US economy in all aspects: Manufacturing PMI, New Orders Index and Employment Index.

Support & Resistance

The nearest “support” awaits at 1.2100 which if successfully passed will continue to 1.2050 and then 1.2000. The nearest “resistance” awaits at 1.2170 which if successfully passed will continue to 1.2200 and then 1.2250.

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USD/CAD​

The USD/CAD bounces off the 50-day EMA at 1.2830 and approaches the 1.2870 mark on Monday’s trading session, characterized by thin liquidity conditions as North American traders are on a long holiday in the observance of the US Independence day. At 1.2867, the USD/CAD is down 0.11% at the time of writing.

USD/CAD Price Forecast: Technical outlook

The USD/CAD is upward biased in the medium term, but last Friday’s price action formed a huge inverted hammer in an uptrend, and the Relative Strength Index (RSI) accelerating downwards to the midline opened the door for further losses.

Therefore, the USD/CAD first support would be the 50-day EMA at 1.2830. Break below would expose 1.2800, and the 100-day EMA at 1.2737.

USD/CHF

The USD/CHF pair attracted some dip-buying near the 0.9560 region on Monday and refreshed the daily high during the mid-European session, albeit lacked any follow-through strength. The pair was last seen hovering around the 0.9600 mark, well below a one-week high touched on Friday.

Signs of stability in the financial markets undermined demand for safe-haven assets, including the Swiss franc, which turned out to be a key factor that extended some support to the USD/CHF pair. That said, the emergence of some selling around the US dollar failed to impress bullish traders or provide any meaningful impetus to the major.

On the other hand, the CHF continued drawing support from the Swiss National Bank's shocker on June 16, when it unexpectedly raised interest rates by 50 bps to curb soaring inflation. This warrants caution before positioning for any meaningful upside for the USD/CHF pair amid relatively lighter trading volumes on the back of a holiday in the US.

XAU/USD​

Gold (XAU/USD) closed in negative territory in the first four days of last week and hit its lowest level since the end of January on Friday. It reached the 1,784.40 level, before making a strong technical bounce to recover above the 1,800 later on.

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July-05, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The USD/CHF advances sharply for the third straight day, snapping two days of consecutive losses that dragged the major to print a fresh two-month low of around 0.9495, gaining almost 1% on Tuesday. At the time of writing, the USD/CHF is trading at 0.9687.

On Tuesday, the USD/CHF opened near Monday highs. Nevertheless, it dipped as the London session opened, towards the daily pivot point around 0.9590, to never look back, overcoming on its way up some resistance levels, like the R1 pivot point at 0.9630, the July 1 high at 0.9641, before settling around just shy of the 0.9700 figure.

USD/CHF Daily chart

The USD/CHF daily chart illustrates the pair as upward biased; however, the double top remains in play. If the greenback extends its gains throughout the week and if USD/CHF buyers step in, a break above the 50-day moving average (DMA) at 0.9733 is on the cards and could accelerate a rally towards the 0.9900 mark. However, on its way north, USD/CHF buyers will need to reclaim April 2020 high at around 0.9802.

GBP/USD

GBP/USD outside-weekly reversal now testing key support- risk for price inflection
Weekly resistance, 1.2166, 1.2261, 1.2481– Support 1.1950-1.2021 (Key), 1.1650, 1.16

The British Pound plunged more than 1% against the US Dollar into the start of the week with GBP/USD on the defensive on the heels of an outside-weekly reversal last week. The decline takes Cable into a critical support pivot we've been tracking for months and the focus is on possible inflection in the days ahead. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart heading into July.

A pivot below threatens significant losses for the Pound with such a scenario exposing the 2020 close low at 1.1650, the 1.16-handle and yearly channel support around 1.1450s- both levels of interest for possible downside exhaustion IF reached. Initial weekly resistance now eyed at the May 2020 low-week reversal close at 1.2166 backed closely by the May low-week close at 1.2261. Ultimately, a rally / close above the 23.6% Fibonacci retracement of the 2021 decline / late-May weekly reversal-close at 1.2480/85 would be needed to invalidate the broader downtrend.

US Dollar​

The US Dollar is starting Q3 the way that it’s traded for most of the first-half of the year, showing strength as both fundamentals and techs continue to favor the USD. The currency now sits at a fresh 19-year-high, coming very close to the Fibonacci level at 106.61. As I had looked at on the final day of Q2, EUR/USD was going to be a big driver behind the US Dollar this quarter as the Euro had continued to push down for support tests at the 1.0340 area, giving appearance of breakdown potential that’s already come to fruition just a couple days into Q3 trade.

US DOLLAR SHORTER-TERM

I looked into this theme last Tuesday, highlighting a key support test in the USD as last quarter was winding down. That support at 103.82 was a prior high from 2017 and last week, this served as a launching pad for that move of USD strength.

At this point, the challenge on the long side is trying to avoid chasing the move. And given that this high watermark in the USD comes along with a low watermark in EUR/USD, there could be a propensity for traders to try to fade on or both moves.

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EUR/USD

On the other hand, The EUR/USD broke below the 2017 low during the overnight session.

This is a bear breakout of the past two months. Bears want a successful bear breakout and measured move down from the June 27th high to the June 15th bear flag low (1.0103). Next, the bears want a measured move down off the two-month range, which would project to under 1.0000.

The odds are the current bear breakout below the two-month range will be a final flag, and bulls will buy soon. Bears need the current bar to close near its low, and they will also need follow-through tomorrow. More likely, today will close with a tail below the bar, which would be disappointing for the bears.

USD/JPY​

The USD/JPY is almost unchanged in a trading session dominated by risk aversion, triggering flows toward safe-haven assets, and in the FX space, the USD, the JPY, and the CHF are the winners. Nevertheless, due to its risk-off nature, the USD/JPY is barely up 0.07%, trading around the 135.70s area.

Recession and high inflation worries are the headlines of the session. That said, European and US equities tumbled while safe-haven flows dominated the session, with the US Dollar Index, which pairs the greenback vs. six currencies, gaining 1.50%, sitting at 106.716. in the meantime, the USD/JPY seesawed in the 135.50-136.40 area during the day, within familiar ranges.

On the downside, the USD/JPY was capped by the strength of the greenback, but on the upside, falling US Treasury yields, mainly the US 10-year Treasury yields, are nose-diving thirteen basis points, sitting at 2.794%, well below the 3.50% YTD high.

USD/CAD

USD/CAD is at the highs of the day, up 175 pips to 1.3034.

That puts the pair within striking distance of the closing high for the year, which was at 1.3037 and set on June 17. That day they pair also set the intraday high at 1.3079.

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