EURUSD, GBPUSD, AUDUSD | US Dollar Outlook Shaky as Yields Tank

17 thg 11, 2023

US DOLLAR FORECAST – EURUSD, GBPUSD, AUDUSD
- The U.S. dollar could head lower in the near term
- The pullback in U.S. Treasury yields will act as a headwind for the greenback
- This article explores the technical outlook for EUR/USD, GBP/USD and AUD/USD, focusing on price action dynamics and key levels in play

The US dollar, as measured by the DXY index, has fallen over 2.15% this month. Selling pressure has eased in the past few days, allowing for a slight recovery. However, it's likely that the downward correction that started a few weeks ago is not yet complete.

One factor that could impact the US currency is the recent movement in Treasuries as traders anticipate the "Fed pivot." Yields have decreased significantly this month, particularly after lower-than-expected US CPI and PPI data for October. This has led to a more dovish outlook on interest rates.

Yields may decrease due to economic weakness shown in recent jobless claims numbers. This could intensify in 2024 as the effects of past tightening measures impact the economy. Additionally, a significant drop in oil prices, down almost 20% this quarter, could further lower yields and the value of the U.S. dollar. If energy costs continue to decline, inflation will slow down more than expected, reducing the need for strict measures by the U.S. central bank.

EURUSD FORECAST – TECHNICAL ANALYSIS
EURUSD remained muted on Thursday after a slight decline in the previous session. The euro still has a positive bias against the U.S. dollar, showing recent higher highs and higher lows while trading above important moving averages.

To confirm the bullish outlook, the pair needs to hold above 1.0765. If this support is maintained, it could lead to a break above the psychological level of 1.0900 and further gains towards Fibonacci resistance at 1.0960, followed by 1.1075.

However, if sellers regain strength and push EUR/USD below 1.0765, the short-term bias may turn bearish for the euro. This could result in a downward move towards 1.0650, with continued weakness increasing the risk of testing trendline support at 1.0570.

GBPUSD FORECAST - TECHNICAL ANALYSIS
GBPUSD continues on a downward trend, but efforts are being made to gain positive momentum. If losses increase, the key support level is at 1.2320. It is crucial to maintain this level in order to revive hopes of an upward trend. Failure to do so could result in a drop to 1.2200.

If the bulls regain control, initial resistance is expected at 1.2450/1.2460. Breaking through this barrier could attract new buyers and potentially lead to a price rally. With further strength, the price may move towards 1.2590, which represents a 50% Fibonacci retracement level from the July/October decline.

AUDUSD FORECAST - TECHNICAL ANALYSIS
AUDUSD fell on Thursday after being rejected at 0.6500. Support levels are at 0.6460, 0.6395, and potentially 0.6350. Resistance lies at 0.6500, with a possible breakout below 0.6600 for a recovery.