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US Dollar Rally Ready for the Next Phase? EUR/USD, GBP/USD, AUD/USD, USD/JPY

US Dollar, EUR/USD, GBP/USD, AUD/USD, USD/JPY – Weekly Technical Outlook

  • US Dollar advances against its major peers last week, more ahead?
  • EUR/USD may aim for early March lows, GBP/USD slide extends
  • AUD/USD sits between trendlines, USD/JPY surges to 2017 levels

EUR/USD – Bearish

The US Dollar ended little changed against the Euro this past week, but it should be noted that EUR/USD trimmed all its gains that it once achieved from earlier in that period. While this is primarily a technical piece, it should be noted that the ongoing situation in Ukraine continues to play a key role for the single currency. An escalation in conflict would likely further pressure the Euro in the week ahead.

Closing under the March 7th low at 1.0806 exposes the bottom from April 2020, making for a key zone of support from 1.0727 – 1.0793. Beyond that sits the 2020 low at 1.0636 and under that is the 138.2% Fibonacci extension of 1.0496. In the event of a turn higher, keep a close eye on the 50-day Simple Moving Average (SMA) as well as the former 1.1122 – 1.1186 support zone. The latter could step in as new resistance.

US Dollar Rally Ready for the Next Phase? EUR/USD, GBP/USD, AUD/USD, USD/JPY

Chart Created in TradingView

GBP/USD – Bearish

The US Dollar resumed gains against the British Pound last week, with GBP/USD setting a new 2022 low as well as closing at the lowest since November 2020. Much like with the Euro, the Sterling remains vulnerable to Ukraine tensions. The pair has exposed the 123.6% Fibonacci extension at 1.2917, where under that sits the 138.2% level at 1.2819.

Beyond the latter sits September 2020 lows, which make for a zone of support between 1.2676 and 1.2763. A bearish Death Cross remains in play between the 20- and 50-day SMAs. The latter could come into play in the event of a turn higher, maintaining the dominant downtrend. Immediate resistance, however, seems to be the former 1.3161 – 1.3195 support zone.

US Dollar Rally Ready for the Next Phase? EUR/USD, GBP/USD, AUD/USD, USD/JPY

Chart Created in TradingView

AUD/USD – Neutral

The US Dollar slightly gained against the Australian Dollar this past week, with AUD/USD leaving behind a Bearish Engulfing candlestick pattern. A confirmatory close under the former 0.7273 – 0.7314 resistance zone, which seems to be holding as new support, could open the door to reversing the February uptrend. Such an outcome would place the focus on rising support – blue lines on the chart below.

Rising support could maintain the upside focus. Still, falling resistance from February 2021 continues to guide the pair lower. With that in mind, these converging trendlines may keep the Aussie in a consolidative state until a breakout is found. Immediate resistance seems to be the 78.6% Fibonacci retracement at 0.7430. Above the latter is the October high. Breaking under rising support exposes the January low.

US Dollar Rally Ready for the Next Phase? EUR/USD, GBP/USD, AUD/USD, USD/JPY

Chart Created in TradingView

USD/JPY – Bullish

The US Dollar surged against the Japanese Yen this past week, with USD/JPY closing at a new 2022 high as well as achieving the highest close since January 2017. In fact, the 2.2% rise was the best performance since March 2020. The pair broke above an Ascending Triangle chart formation, opening the door to resuming the dominant uptrend since the beginning of 2021.

Immediate resistance is the 100% Fibonacci extension at 117.29, followed by the 123.6% level at 118.19. Beyond the latter sits the December 2016 high at 118.66. In the event of a turn lower, keep a close eye on the ceiling of the triangle. Falling back under the latter opens the door to testing rising support from November.

US Dollar Rally Ready for the Next Phase? EUR/USD, GBP/USD, AUD/USD, USD/JPY

Chart Created in TradingView

— Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter