EUR/USD, GBP/USD and USD/CHF Forecasts – US Dollar on its Back Foot

EUR/USD Technical Analysis

The Euro rose again during the trading session on Tuesday in early trading as we reached the 1.18 level. The 10-year yield in the United States is dropping, and it is below that crucial 4.30% level, so this does make a certain amount of sense.

The question at this point that will have to be answered is whether or not we can continue. We are a little stretched, and of course, headlines coming out of the Middle East could change things. But it appears that the trading community believes that the news is probably more likely to be positive than negative out of that situation, and if that’s going to be the case, then the Euro probably continues to recover. I’m watching the 1.1833 level above there, then I think we could move quite a bit higher. If we show signs of exhaustion here, it could be an excellent shorting opportunity.

GBP/USD Technical Analysis

The British Pound has broken above the crucial 1.35 level and is now somewhere near the 1.3550 level. That being said, it looks very strong, and it looks like it is ready to continue going to the upside, but it is also stretched. I would watch the 10-year yield in America if it starts to pick up again, that could show signs of exhaustion that you start selling into. Otherwise, we could go looking at the 1.3750 level.

USD/CHF Technical Analysis

The US dollar has fallen pretty significantly over the last 2 days against the Swiss Franc as we are now testing the bottom of a range that had been fairly important for some time. The 0.78 level is an area that I would be watching closely, as it was previous resistance and, in theory, should be supported. If we see the US dollar start to pick up a little bit worldwide, perhaps through yields rising, this might be the first place I look to get long of the dollar. If we break down from here, that’s fine. The Swiss Franc is probably the least of the 3 other currencies that I would want to own over the US dollar. I probably would be quicker to own either the Pound or the Euro. So, this is a long only market for me at the moment.

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