Most Read: US Dollar Jumps After NFPs Smash Estimates, Gold Slumps
The U.S. dollar surged on Friday after economic data revealed that U.S. employers added 353,000 workers in January, nearly double market expectations. The exceptionally robust job creation, along with red-hot average hourly earnings, signals that the economy is holding up remarkably well and may even be reaccelerating, a situation that could deter the Fed from moving off its restrictive stance imminently.
Immediately following the release of the NFP report, Treasury yields rocketed upwards, as traders unwound dovish bets on the central bank’s policy path. These moves may gain traction in the near term if incoming information remains consistent with strong growth and sticky inflation. For this reason, it is imperative to keep an eye on the economic calendar in the coming weeks.
US DOLLAR (DXY INDEX) & US YIELDS
Source: TradingView
Putting fundamentals aside, this article will focus on the technical outlook for three U.S. dollar pairs: EUR/USD. USD/JPY and GBP/USD, dissecting important price thresholds that should be on every trader’s radar in the coming days following the U.S. employment report – a release that brought significant volatility to FX markets.
Interested in learning how retail positioning can offer clues about EUR/USD’s near-term trajectory? Our sentiment guide has valuable insights about this topic. Download it now!
| Change in | Longs | Shorts | OI |
| Daily | 42% | -36% | -2% |
| Weekly | 26% | -29% | -2% |
EUR/USD TECHNICAL ANALYSIS
EUR/USD was on track to break the upper boundary of a falling wedge but took a sharp turn to the downside following the U.S. jobs report, dropping towards cluster support at 1.0780. The bulls need to defend this level vigorously; failure to do so could push prices towards 1.0730, followed by 1.0650.
In the event that EUR/USD manages to reverse higher from its current position, technical resistance extends from 1.0840 to 1.0860. Above this key range, the market focus will likely be on the 50-day simple moving average at 1.0915, followed by 1.0950.
EUR/USD TECHNICAL ANALYSIS CHART
For a complete overview of the yen‘s prospects, request your complimentary Q1 trading forecast now!
Recommended by Diego Colman
Get Your Free JPY Forecast
USD/JPY TECHNICAL ANALYSIS
USD/JPY blasted higher on Friday, breaking past key levels, and pressing against trendline resistance at 148.35. With bullish momentum on the U.S. dollar’s side, the pair may soon overcome this barrier, potentially initiating a move towards 148.90. Further strength could lead to a rally towards 150.00.
Conversely, if sellers reappear and trigger a pullback, initial support can be found near the 100-day simple moving average around 147.40. If prices dip below this level, a retracement towards 146.00 and possibly even 145.30 cannot be ruled out.
USD/JPY TECHNICAL CHART
USD/JPY Chart Created Using TradingView
Want to know more about the British pound‘s outlook? Find all the insights in our Q1 trading forecast. Request a free copy now!
Recommended by Diego Colman
Get Your Free GBP Forecast
GBP/USD TECHNICAL ANALYSIS
GBP/USD has spent recent weeks consolidating within a symmetrical triangle, a continuation pattern characterized by two converging trendlines: a rising one linking a series of higher lows and a falling one connecting a series of lower highs.
Symmetrical triangles are validated when prices push beyond the boundaries of geometric shape, with a stronger confirmation signal if the breakout aligns with broader trend in play.
For GBP/USD, traders should monitor two critical levels: resistance at 1.2750 and support at 1.2630. A breach of support may lead the bearish camp to target levels such as 1.2600, 1.2560, and 1.2455. Meanwhile, a breach of resistance could bring into focus 1.2830 and potentially 1.3000.
GBP/USD TECHNICAL CHART
element inside the
element. This is probably not what you meant to do!Load your application’s JavaScript bundle inside the element instead.
Unstoppable Bulls: Expert Setups for EUR/USD, USD/JPY, and GBP/USD
When it comes to forex trading, few currency pairs generate as much buzz and excitement as the EUR/USD, USD/JPY, and GBP/USD. These three major currency pairs are highly liquid, making them a prime choice for traders looking for fast-paced and dynamic opportunities in the market.
The past few months have been particularly lucrative for traders of the EUR/USD, USD/JPY, and GBP/USD, with bullish trends dominating the charts. In this article, we’ll take a closer look at these three currency pairs and analyze expert setups that have the potential to yield profitable trades in the coming weeks.
EUR/USD: Strong Technical Setup Points to Further Upside
The EUR/USD is the world’s most traded currency pair, accounting for approximately 30% of all forex transactions. This is due to the high economic importance of the Eurozone and the United States, as both regions are major players in the global economy.
Currently, the EUR/USD is in the midst of a strong uptrend, gaining over 6% since July 2020. Looking at the weekly chart, we can see that the currency pair has just broken through a major resistance level at 1.2200. This level has acted as a critical barrier for the EUR/USD, with multiple failed attempts to break through it in the past few months.
The breakout above 1.2200 signals a potential continuation of the uptrend and could bring the EUR/USD to its next resistance level at 1.2500. Additionally, the relative strength index (RSI) is showing bullish momentum, supporting the case for an upward move.
Entry: Long at 1.2250
Stop loss: 1.2050
Take profit: 1.2500
USD/JPY: Bullish Sentiment Remains Strong
The USD/JPY is another popular currency pair that has seen a strong uptrend in recent months. This currency pair measures the strength of the US dollar against the Japanese yen, making it a popular choice for traders looking to take advantage of movements in the US economy.
Currently, the USD/JPY is trading near multi-year highs, flirting with the 110.00 level. The bullish trend has been fueled by a combination of factors, including the ongoing roll-out of COVID-19 vaccines, additional stimulus measures from the US government, and an improving economic outlook.
Looking at the weekly chart, we can see that the USD/JPY has broken above a key resistance level at 109.00, which makes for a strong bullish signal. Moreover, the RSI is in overbought territory, indicating that there is still strong bullish momentum behind the currency pair.
Entry: Long at 110.50
Stop loss: 109.00
Take profit: 113.00
GBP/USD: Brexit Deal and Strong Data Boost Uptrend
The GBP/USD has seen a remarkable bull run since the start of the year when it was trading at just 1.3600. The currency pair has surged over 13% since then, with the main driver behind this being the resolution of the Brexit deal and upbeat economic data from the UK.
After months of negotiations and uncertainty, the UK finally reached a trade deal with the European Union at the end of 2020. This agreement helped ease fears and boosted confidence in the UK economy, leading to strong gains in the pound.
On the technical side, the GBP/USD is currently trading in an ascending channel formation on the weekly chart, with support at the 1.4000 level. The currency pair has recently pulled back to this support level, providing an opportunity to enter at a favorable price.
Entry: Long at 1.4000
Stop loss: 1.3800
Take profit: 1.4500
In Conclusion
The EUR/USD, USD/JPY, and GBP/USD are three of the most dynamic and popular currency pairs in the forex market. Recent market movements have provided excellent opportunities for traders to capitalize on these trends, and our expert setups aim to take advantage of potential further upside in these bullish trends.
Remember to always risk manage your trades and stick to a disciplined trading plan. These setups are merely suggestions and should not be taken as investment advice. Happy trading!
