**U.S. Dollar Rallies Ahead of Weekend: Forex Analysis for EUR/USD, GBP/USD, USD/CAD, and USD/JPY**
*Adapted and expanded from an article by Vladimir Zernov on FX Empire*
The U.S. dollar continued its upward momentum as investors repositioned ahead of the weekend, bolstered by steady economic data and shifting market sentiment. Positive U.S. fundamentals and cautious risk tones in the global economy lent support to the greenback across major currency pairs. Solid labor market statistics and inflation resilience have impacted investor expectations for Federal Reserve policy, with fewer pricing in rate cuts in the near term.
Below is a detailed look at key currency pairs, supplemented with technical and fundamental aspects that have influenced recent forex trading activity.
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## EUR/USD: Under Persistent Pressure
The euro remained on a defensive footing against the U.S. dollar amid growing dollar demand. The pair’s recent failed attempt to reclaim the 1.0900 region demonstrates ongoing headwinds for the single currency.
### Key Developments:
– Eurozone data has remained lackluster, contributing to EUR’s relative weakness. Declining manufacturing activity and stagnant inflation figures increase the likelihood of the European Central Bank maintaining a dovish tilt.
– The ECB’s recent communication suggests a possible rate cut in the coming months, while the Fed remains data dependent but with a more hawkish undertone.
– A broad USD rally—supported by strong U.S. economic indicators—added to euro downside pressure.
### Technical Perspective:
– Immediate support is seen near the 1.0800 level. A clearly established break below this could open the path toward 1.0740 and potentially lower.
– On the upside, resistance stands between 1.0880 and 1.0900. A close above 1.0900 would be needed to signal any shift in near-term sentiment.
– Moving averages on the daily chart suggest a neutral-to-bearish bias, with the 50-day EMA beginning to slope downward.
### Outlook:
Until traders receive signs that the ECB may reassert a firmer grip on inflation or growth improves across the bloc, pressure on the euro could continue. U.S. macroeconomic divergence remains a core catalyst for EUR/USD’s downward bias.
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## GBP/USD: Struggles Below 1.2600
The British pound also faced intensifying headwinds, unable to reclaim the 1.2600 handle, as dollar strength remained the dominant theme heading into the weekend.
### Contributing Factors:
– With UK inflation easing and economic indicators pointing to fragile growth, expectations have increased for a Bank of England pivot toward rate cuts later in 2024.
– Risk aversion triggered by weak global manufacturing activity and geopolitical tensions added to selling pressure on risk-sensitive currencies like the pound.
– U.S. yields continue to press higher, creating a widening interest rate differential in favor of the dollar.
### Technical Dynamics:
– The GBP/USD pair has found intermittent support near the 1.2500 level. Loss of this level increases the likelihood of a retest of 1.2450 and the broader 1.2400 zone.
– Resistance is seen at 1.2590–1.2600, where multiple failed breakout attempts have fortified overhead barriers.
– Oscillators such as the RSI are pointing to neutral but gradually bearish conditions, suggesting limited upside momentum in the near term.
### Near-Term Forecast:
Unless the UK surprises markets with stronger than expected growth or inflation data, the British pound may continue lagging the greenback. Any improvement in global risk appetite could offer limited support, but macro divergence remains the dominant driver.
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## USD/CAD: Canadian Dollar Depreciates Further
The USD/CAD pair rose strongly throughout the week, nearing two-month highs, as the U.S. dollar’s bullish trend collided with domestic challenges in Canada.
### Primary Drivers:
– Canada’s latest monthly GDP report signaled slowing economic activity, prompting increased bets
Read more on EUR/USD trading.