EUR/USD, GBP/USD and USD/CHF Forecasts – US Dollar Drifts Lower as Rates Do the Same

EUR/USD Technical Analysis

The euro had initially dipped a bit during the trading session on Thursday but is starting to turn things around. Keep in mind that Thursday is a central bank decision day coming out of the ECB and also the Bank of England, but ultimately, this is a pair that is just hanging around the 50-day EMA looking to try to get back to that 1.1850 region.

I do think we start to grind higher mainly because of rates in America potentially peaking. With that being said, if for some reason the ECB suggests that it is in fact going to start loosening, that could drive this pair back down to the 200-day EMA. Regardless, I do not think that the euro has the strength to break out of the consolidation we’ve been in for a year.

GBP/USD Technical Analysis

The British pound initially pulled back but has since rallied as rates in America dropped. That being said, the Bank of England interest rate decision is expected to be no change. The tone of the statement will be what everybody pays attention to.

I think we’re just going to re-enter this consolidation phase, forming a little bit of a bullish flag as well. It’s clear that the market wants to sell the US dollar based on the structure of price over the last 2 or 3 weeks, but whether or not it gets a reason to, mainly if rates drop in America, remains to be seen.

USD/CHF Technical Analysis

Finally, the US dollar has fallen against the Swiss franc as well and again those rates dropping would be a major factor as to why. That being said, this is a pair that I do not short. I don’t want to pay the swap, and I just look at it as buying on the dip remaining the way forward.

The 50-day EMA sitting just below is possibly going to offer a little bit of support. I certainly think the 0.78 level will, but we’ll have to wait and see how it reacts when we get down there.

I’ve got no interest like I said in shorting this pair. Quite frankly, I don’t want to pay for the privilege, so if it does continue to go lower, I’m more likely to buy one of the other 2 pairs in this video.

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