EUR/USD, GBP/USD and USD/CHF Forecasts – US Dollar Moving on Interest Rates

EUR/USD Technical Analysis

The US dollar continues to move on interest rates and headlines out of the Middle East. The euro has been very noisy during the trading session but has pulled back almost from the beginning as the United States dollar continues to fight back. The 1.18 level above is significant resistance that expands quite a bit of energy keeping this market somewhat consolidated.

The 1.1850 level above, I think, is the top of the resistance, and if we can break above there, then the euro can go flying. Right now, there are a lot of questions about whether or not the risk appetite will return. If the Strait of Hormuz is open, that also provides a lot of relief for the European Union via energy. I think right now it makes quite a bit of sense that we go sideways as we wait for the results.

GBP/USD Technical Analysis

The British pound has pulled back a bit during the early hours on Tuesday but found enough support underneath the 1.35 level to turn things around and show signs of life. The 1.35 level is a large, round, psychologically significant figure that a lot of people will be watching. If we rally from here the 1.36 level is your target. A breakdown here probably has the pound testing the 50-day EMA, which is down at the 1.3420 level.

USD/CHF Technical Analysis

The US dollar has rallied slightly against the Swiss franc as we continue to just hang around the 0.78 level. The 0.78 level is an area that’s been both support and resistance multiple times and I do think that we have to watch it very closely. If we can continue to go higher, then you’re looking at a move toward the 0.7860 level, where the 50-day EMA presently sits.

The interest rate differential in this pair makes me interested in buying it. I don’t have any interest in shorting it, and you have to keep in mind that the Swiss franc is backed by the Swiss National Bank, which is perfectly fine with coming in and intervening in the market if the Swiss franc gets a little overbought. I think we probably have more upward momentum than down in the longer term, but there are a lot of questions to ask about the Middle East right now, and that has things in a state of flux.

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