Forex Forecasts – US Dollar Flexes Strength Across EUR/USD, GBP/USD, and USD/CHF

EUR/USD Technical Analysis

The Euro has gone back and forth during the course of the trading session here on Tuesday as we continue to hang on by a thread. We are at the bottom of a recent consolidation area, and I do think at least at this point in time there are a lot of questions to ask when it comes to the Euro. Interest rates in America will be a big driver typically of this currency pair, and despite the fact that rates have drifted a little bit lower, they are still uncomfortably high, and there are concerns in the Middle East, which has a major influence on that as well.

The recent area of consolidation could be in the process of trying to form a double bottom; we’ll just have to wait and see. Short-term rallies will more likely than not continue to be swimming upstream if recent history is to be believed.

GBP/USD Technical Analysis

The pound initially tried to rally but then gave back gains as the market is still hanging around the 1.33 level. This is with elevated US rates. There are concerns in the Middle East, and sometimes traders will run to the US dollar in times of concern. It is possible that’s what’s going on here. The market is likely to continue to be noisy, but it has decidedly turned bearish over the last couple of weeks.

USD/CHF Technical Analysis

And the US dollar continues to grind higher against the Swiss Franc. The positive swap differential favors the US dollar as traders continue to see value in the greenback. We had recently consolidated and now have broken out of that little consolidation range to show increasing bullish pressure.

The market is typically one that’s very choppy and somewhat sideways, and more of a grind even when it does trend, so patience is something that I typically find I have to employ here against the Franc. But getting paid at the end of every day is a huge bonus here with that positive swap, and right now I think that is one of the main drivers.

If you’d like to know more about how to trade forex, please visit our educational area.