U.S. dollar climbs, impacts major currency pairs despite job openings hitting a two-year low.
EUR/USD dips as Fed rate hike expectations wane, testing key Fibonacci support levels.
GBP/USD’s ascent within channel at risk, with pivotal support levels under scrutiny.
USD/JPY’s bearish stance challenged by a potential double bottom formation.
Anticipated Fed rate cuts starting mid-2024 fueling a recalibration across currency markets.
Quick Fundamental Outlook
The U.S. dollar rebounded modestly, rising 0.41% against major currencies, despite a decline in U.S. job openings to their lowest since early 2021, which could signal an end to the Fed’s rate hikes.
This shift in monetary policy outlook has pressured major pairs, with the EUR/USD down 0.5% to $1.0782, GBP/USD falling 0.4% to $1.258, and the USD/JPY holding at 147.26.
The market’s anticipation of the Federal Reserve’s rate cuts, potentially starting mid-2024, has added to the dollar’s strength, influencing these currency pairs amidst a broader context of global economic recalibration.
EUR/USD Prices Forecast
EUR/USD – Chart
The EUR/USD is captured in a downward trajectory on the 4-hour chart, currently testing the Fibonacci retracement level at 1.07922. The RSI indicator suggests bearish momentum at 28, teetering on the edge of oversold conditions, which could presage a potential reversal or pause in the downtrend.
The next critical support lies at the 0.618 Fibonacci level of 1.07934, which, if breached, could see the pair slide towards 1.07484.
Conversely, a bounce from current levels may encounter resistance at 1.0850, delineated by the recent swing low. The pair’s ability to sustain above the 0.5 Fibonacci level at 1.08359 remains crucial for any bullish argument.
GBP/USD Prices Forecast
GBP/USD – Chart
In the recent trading sessions, the GBP/USD pair has been navigating within an ascending channel, currently hovering near the lower boundary. The currency trades marginally below the pivotal 1.2605 level, suggesting a potential for a downward trend to the first support at 1.24559 if the channel’s support does not hold.
With the RSI at 42, indicating bearish momentum yet not in the oversold territory, there’s room for downward movement before a technical bounce might occur.
However, should the pair maintain its stance above the current support, an attempt to reach the upper channel line near 1.28046 could be seen. The key lies in the pair’s ability to sustain within this bullish structure.
USD/JPY Prices Forecast
USD/JPY – Chart
The USD/JPY pair exhibits a bearish tone, trading near a pivot of 147.184 with key supports at 146.266 and 145.435. Immediate resistance is found at 147.732.
The Relative Strength Index, at 43.99, aligns with bearish sentiment, suggesting potential for further downside. However, the presence of a double bottom around 146.250 provides a glimmer of hope for bulls.
Should the pair rebound from this level, a retest of the pivot and immediate resistance is plausible. Traders should monitor for a decisive break from these confines to gauge the next directional move.
Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.