EUR/USD, GBP/USD and USD/CHF Forecasts – US Dollar Waiting for Clarity

EUR/USD Technical Analysis

The Euro is just a touch down on the day early in the New York session on Tuesday as we continue to see the 1.16 level offer a bit of resistance. We are hanging around the 200-day EMA, which, of course, is an indicator that a lot of people will be watching.

I also recognize that traders will continue to have to go back and forth, mainly because they don’t know what to do about US rates, and of course, the fact that the war is greatly influencing some of the behavior by traders around the world, as far as risk appetite is concerned. The ECB was a little bit more hawkish than expected last time, but the Federal Reserve, of course, is stuck with higher rates, so I think you’re just looking at a grind sideways, perhaps with more of a negative tilt.

GBP/USD Technical Analysis

The British pound has fallen a bit during the early part of the session on Tuesday as the 50-day EMA continues to cause a little bit of resistance. The 1.35 level above is significant resistance as well so I’m watching this area and it does look like it’s trying to stay in the same range that we had been in between 1.35 and 1.3250.

The 1.3250 level is an area that is the floor of the market, and I do think that’s something that you have to pay close attention to. If we were to break down below there, it would be a very ugly turn of events for the British pound, probably sending it down to 1.30. As things stand right now, this looks like a currency that wants to go sideways, and with that being the case, I think you’re just playing the range.

USD/CHF Technical Analysis

The US dollar is a little bit positive against the Swiss franc, but it has become apparent over the last week or two that the 0.79 level will be difficult to overcome. If we can break above that level, it could send this market looking to the 200-day EMA or the 0.80 level. If we can break above that, then it really opens things up, and it could send the market to the 0.81 level.

Falling from here and breaking down below the 50-day EMA opens up a drop down to the 0.76 level maybe. That would be a pretty ugly turn of events, but keep in mind the Swiss National Bank still threatens intervention if the franc gets too strong. So, I tend to think of this more as a buy on the dip opportunity, although we just don’t have any momentum.