The dollar edges higher, the British pound comes under pressure, and the EUR-USD pair slips modestly

Currencies

In this update, we provide a comprehensive expert-level analysis for the principal Forex pairs—EUR/USD, USD/JPY, GBP/USD, AUD/USD, and USD/CHF—blending both fundamental and technical perspectives to support informed trading decisions.

EUR/USD

Fundamentally, the EUR/USD pair is being shaped by the Eurozone’s moderate economic growth, with inflation nearing the European Central Bank’s (ECB) targets. The ECB continues its accommodative stance with low rates and quantitative easing, supporting economic expansion. Political stability and ongoing trade negotiations in the Eurozone further influence sentiment.

Technically, EUR/USD is quoted at a bid of 1.1630 and ask of 1.1635. The pair is consolidating, as indicated by a symmetrical triangle pattern, with the Relative Strength Index (RSI) at 55, reflecting neutral momentum. Key support stands at 1.1600 and 1.1550, with resistance at 1.1700 and 1.1750. A breakout above resistance may catalyze a bullish trend, while a move below support would imply bearish momentum.

Upside risk stems from stronger-than-expected Eurozone data, while downside risk resides in dovish ECB signals or disappointing economic releases.

USD/JPY

The USD/JPY pair is currently buoyed by robust U.S. economic indicators and the Federal Reserve’s tightening bias, contrasted by Japan’s ongoing monetary easing. Trade relations and regional security also play significant roles.

Technical analysis shows USD/JPY trading at a bid of 154.49 and ask of 154.56. The pair demonstrates bullish momentum, supported by a bullish MACD and an ascending triangle pattern. Support is identified at 154.00 and 153.50, with resistance at 155.00 and 155.50. A confirmed move above resistance would likely extend the bullish trend.

Upside risk is tied to continued U.S. economic strength and further Federal Reserve tightening, while downside risk could materialize from Bank of Japan interventions or geopolitical tensions.

GBP/USD

The GBP/USD pair is influenced by moderate UK economic growth and inflation slightly exceeding the Bank of England’s (BoE) target. Post-Brexit trade negotiations and UK political developments also affect market sentiment.

Technically, GBP/USD is quoted at a bid of 1.3169 and ask of 1.3195. The RSI stands at 60, indicating potential for upward movement. The chart reveals a double bottom, suggesting possible reversal to the upside. Key support is at 1.3100 and 1.3050, with resistance at 1.3200 and 1.3250. A breakout above resistance could signal a new bullish phase.

Upside risk is driven by positive UK data or hawkish BoE tone, while downside risk is associated with dovish policy or political uncertainty.

AUD/USD

AUD/USD is chiefly affected by Australia’s commodity exports—especially to China—along with the Reserve Bank of Australia’s (RBA) monetary stance. Stable domestic growth and moderate inflation provide a steady backdrop, while trade relations and global commodity price shifts add volatility.

Technically, the pair shows a bid of 0.6526 and ask of 0.6528. The MACD remains neutral, and price action is forming a rectangle pattern, indicating consolidation. Support is located at 0.6500 and 0.6450, with resistance at 0.6600 and 0.6650. A breakout above or below this range could indicate a new directional move.

Upside risk comes from rising commodity prices and strong Chinese demand, while downside risk is linked to global trade tensions or falling commodity values.

USD/CHF

USD/CHF is primarily influenced by U.S. economic health and the global risk climate, with the Swiss Franc serving as a traditional safe haven. The Federal Reserve’s policy actions and the Swiss National Bank’s approach are critical, while Switzerland’s resilient economy adds stability.

Technically, USD/CHF is trading at a bid of 0.7908 and ask of 0.7925. The RSI is 50, reflecting neutral momentum, and a head and shoulders pattern hints at a possible bearish reversal. Support levels are set at 0.7900 and 0.7850, while resistance is at 0.7950 and 0.8000. A move above resistance would support a bullish view, while a drop below support could trigger further weakness.

Upside risk is associated with strong U.S. data and a risk-on market environment, while downside risk is heightened during global uncertainty, driving safe-haven flows to the Swiss Franc.

Market Sentiment

The overall sentiment across major Forex pairs is one of cautious consolidation. Technical indicators often reflect neutral or slightly bullish momentum, with price action coiling near key support and resistance levels. This environment is conducive to breakout-driven strategies, where traders should closely monitor for decisive moves above resistance or below support to confirm trend direction.

Recommendations

Traders are advised to prepare for breakout opportunities, particularly as the major pairs approach critical technical levels. For EUR/USD, USD/JPY, and GBP/USD, consider setting entry orders slightly above resistance and below support to capture potential momentum shifts. Stop-losses should be placed just beyond recent swing highs/lows to manage risk. Monitoring central bank communications and upcoming economic releases is essential, as they may catalyze volatility and directional moves.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.