Forex Outlook: US Dollar gained last week vs Major Currencies


The US dollar advanced versus all the major currencies last week and rose higher against most of them for a second straight week as market traders continued to position themselves for the potential unwinding of the US Federal reserves quantitative easing program. This week has some very big fundamental events to watch for with the highlight being the US NonFarm Payrolls Employment data on Friday.

There are also interest rate decisions out of Australia, the United Kingdom and the Eurozone to look out for as well as some manufacturing data out of the US and China and other 2nd tier releases. See more currency pair comments and economic event highlights below.

Major Currency Pair Commentary & Levels:

EUR/USD: The euro declined against the US dollar for a second straight week last week and closed out the week just above the 1.3000 level. Look for the 1.3000 level to be the most important level for the week as the bulls and bears will fight it out here to wrestle control of this currency pairs direction. Upward momentum will likely see resistance into the 1.3050 level in the short-term with the 1.3100 level likely to provide more resistance. Decline under the 1.30 level could see the pair on its way to the 1.2850 price level in the near future. Look for support in the 1.2950 area and then the 1.2900 area for this pair, before and if, this pair declines further.


GBP/USD: The British pound sterling also fell for a second straight week last week against the US dollar and closed under the 1.5250 level which potentially sets up a new test of the 1.50 area in the near future. The GBP/USD will likely run into resistance at the 1.5250 level on upward momentum with the 1.5320 — 1.5350 area also providing a heavy previous resistance area. Further decline this week will likely see support coming in at the 1.5085 — 1.5100 area before a test of 1.5000 can occur.


USD/JPY: The dollar rose again last week to gain against the Japanese yen for a second straight week after the USD/JPY had fallen for the previous four weeks. This week looks to be all about the 100.00 level and whether this pair can fight through this obstacle to the upside. The pair currently trades at 99.10 level and look for buying support at the 98.50 area and further down the line at the 97.50 level. There will be likely selling resistance at the 100.00 level from bears looking for this pair to fall lower. If this pair can overcome the 100 level, we could see a test of the 2013 high points soon to follow.


USD/CHF: The US dollar gained against the Swiss franc for a second straight week last week and looks to test the 0.9500 level this week with further gains. The USD/CHF currency pair currently trades around the 0.9440 exchange rate and will likely encounter resistance at the 0.9500 level and then in the 0.9550 — 0.9575 area. Bearish price action for the week would likely see support coming in at the 0.9350 — 0.9330 area while further bearish action would likely see support into the 0.9260 — 0.9250 area.


USD/CAD: The US dollar continued its gain last week against the Canadian dollar after the previous week’s sharp advance. The USD/CAD currency pair currently trades over the 1.0500 level and is currently at the highest levels since 2011. If this currency pair finds support above the 1.0500 level we could see a test of the 2011 highs and perhaps the highest levels since 2009. We look for support in this pair at the 1.0500 level with further support down the line near last week’s lowest at the 1.0425 — 1.0450 area. Further upward momentum would likely run into resistance in the 1.0600 major level with previous resistance being spotted at the 1.0660 — 1.0680 area.


AUD/USD: The Australian dollar continued its decline against the US dollar last week for a second straight week and the seventh out of the last eight weeks. Further decline this week will likely target the 0.9000 major support level with the 0.8830 — 0.8850 previous support area sitting below. Upward price action will find resistance at the 0.9250 level with previous resistance being found around the 0.9330 — 0.9390 area.


NZD/USD: The New Zealand dollar was virtually unchanged against the US dollar last week and looks to find some buying support at the 0.7750 level this week as the pair has consolidated for the past five or six trading days right around this area. This pair could find upward momentum run into resistance around the 0.7850 level before the major 0.8000 level comes into focus. Further downward momentum would likely see this pair supported around the 0.7650 — 0.7670 area and then the 0.7600 level before the 0.7500 exchange rate becomes a major target.


Highlights of Fundamental Economic Events Next Week

Sunday, June 30

China — leading index
Japan — Tankan manufacturing data
Australia — manufacturing index

Monday, July 1

China — manufacturing PMI
euro zone — consumer price index
United States — ISM manufacturing data
euro zone — purchasing managers index
United Kingdom — purchasing managers index

Tuesday, July 2

Australia — interest rate decision
euro zone — producer price index
United States — factory orders data

Wednesday, July 3

China — non-manufacturing PMI
Australia — retail sales data
Australia — trade balance
United States — ADP employment data
euro zone — retail sales
United States — weekly jobless claims
United States — trade balance
United States — ISM non-manufacturing

Thursday, July 4 – *American Holiday

United Kingdom — BOE interest rate decision
euro zone — ECB interest rate decision

Friday, July 5

Japan — leading index
Switzerland — consumer price index
United States — non-farm payroll report
Canada — employment change report
Canada — Ivey purchasing managers index

Written by Zac Storella, CountingPips Forex Blog & Currency Pair Research