Title: USD Shows Broad Strength as New Trading Week Begins
Original article by Greg Michalowski, featured on InvestingLive.com
Source: https://investinglive.com/technical-analysis/the-usd-is-mostly-higher-to-kickstart-the-new-trading-dayweek-20250825/
At the start of a new trading week, the US dollar (USD) is showing signs of strength against a variety of major currencies. This movement reflects a mix of technical positioning, macroeconomic developments, and shifting sentiment among traders. The USD’s momentum is being closely monitored by forex market participants looking for directional cues following a week of relatively range-bound and choppy trading behavior.
This article offers a detailed breakdown of current price action across key currency pairs involving the USD, along with relevant technical indicators and performance comparisons through the trading day.
Overview of Dollar Strength
As global markets open, the USD is registering broad gains, particularly against the commodity currencies such as the CAD, AUD, and NZD. The dollar is also performing well against the JPY and CHF, while its moves against the EUR and GBP are more subdued, though still generally positive. The market reflects a cautious tone ahead of potential catalysts later in the week, such as U.S. macroeconomic data releases and central bank commentary.
Key observations so far include:
– The USD index has edged higher and is hovering near early session highs.
– US yields are modestly stronger, lending some additional support to the dollar.
– Commodity currencies are broadly weaker, likely reflecting a combination of risk-off sentiment and technical retracements.
– The Japanese yen remains soft, weighed down by relative yield spreads and continued BoJ dovishness.
Below is a more detailed breakdown by currency pair, focusing on price levels, technical analysis, and milestones for traders to watch.
EUR/USD: Holding Support but Dollar Dominant
– The EUR/USD pair is currently testing the 100-hour moving average (MA) near the 1.0845 area.
– The pair saw a modest recovery in early trading, reaching a session high near 1.0872, but this fell short of its 200-hour MA at approximately 1.0884.
– From a technical standpoint, remaining below the 200-hour MA suggests continued potential for downward pressure.
– Near-term support lies at 1.0845; a break below this could open up a test toward the 1.0800 area.
– On the upside, surpassing the 200-hour MA would shift bias more positively for bulls.
GBP/USD: Below Moving Averages
– The pound is trading marginally lower against the dollar, reflecting USD strength rather than GBP-specific weakness.
– In the previous week, GBP/USD closed below both the 100-hour and 200-hour moving averages, located at 1.2711 and 1.2713 respectively.
– During today’s session, the rebound stalled just before these key resistance levels, with the pair reaching a peak near 1.2703 before moving lower again.
– Continued failure to reclaim these MAs will likely maintain bearish pressure in the near term.
USD/JPY: Bid Above Key Resistance Levels
– USD/JPY remains firmly bullish, with the pair surpassing key resistance zones early in the session.
– The Boston of recent upticks reflects a recovery in US Treasury yields and a slight uptick in USD bullish sentiment across global desks.
– Technical targets cleared include 146.94 (early session resistance) and 147.39, which previously posed a barrier on the pair’s advance.
– With a sustained push above 147.39, there is potential for the pair to test the 2023 highs near 147.87 and potentially 148.00.
– Japanese authorities remain sensitive to rapid yen depreciation, so this area could invite further scrutiny or verbal intervention.
USD/CHF: Support Holding Near 0.8818
– The Swiss franc is modestly weaker against the greenback, with USD/
Read more on EUR/USD trading.