Weekly Forex Technical Analysis May 31–4 June 2021: US Dollar Index, USDCAD, EURUSD, GBPUSD, and GBPJPY (2024)
Get the Forex Forecast using fundamentals, sentiment, and technical positions analyses for major pairs for the week of May 31, 2021 here.
U.S. Dollar Index
The weekly price chart below shows the U.S. Dollar Index printed an indecisive though perhaps slightly bullish doji candlestick last week. However, there are still several bearish signs, most notably the fact that the price action is still respecting the resistance level identified at 11716.The index is still below its prices from both six and three months ago which shows a long-term bearish trend persists in the greenback. Overall, next week’s price movement in the U.S. dollar looks very slightly more likely to be downwards than upwards but remains uncertain. Much is likely to depend upon whether the resistance level at 11716 holds.
Although the Canadian dollar does not have a good track record of respecting its own price momentum, the chart below shows we have seen a firm and persistent long-term bullish trend in the Loonie ever since the initial recovery from the coronavirus price shock of March 2020. Despite the strong long-term bearish trend, bears should be cautious of the big round number at 1.2000 which has yet to be reached. Bears should also be cautious of the fact that last week’s price range was very narrow, so it will probably be worth waiting for the price to get established below both the low and the big round number at 1.2000.
Gold
Gold again saw a firm advance during the week to reach a new 50-day high price and end the week near the top of its weekly price range. The price is now considerably higher than it was 3 months ago, which is normally a good measure of a bullish trend. Although the breakout here is not especially strong, gold does have a good historical record on the long side when it begins to break to new long-term highs.
The British pound initially fell during the course of the week, but has turned around to show signs of resilience. What the weekly chart does not show you is just how resilient it was on Friday to find itself close to the 1.42 handle. At this point, it looks as if we can break down rather soon, and a move above the 1.4233 level would have me looking for a bigger move towards the 1.45 handle. At this point, it looks like pullbacks in the British pound continue to be buying opportunities based upon value and the fact that the US dollar is shrinking in general.
GBP/JPY
The British pound also had a big week against the Japanese yen, but unlike against the US dollar, it actually broke out. With that being the case, we are above the ¥155 level, and I like buying dips here. I think we will go looking towards the ¥157.50 level, and then eventually the ¥160 level. Even if we break down below the ¥155 level, there is so much support underneath at the ¥153.50 level that I would only consider that to be “a bargain” that I would be willing to take advantage of. Keep in mind that this pair is highly sensitive to risk appetite.
EUR/USD
The euro fluctuated during the week, but the most interesting thing is that we continue to struggle above the 1.22 handle. By doing so, it tells me that there is a massive amount of resistance above at the 1.23 level, as you can envision the “gap” that sits above this candlestick. At this point, I think we will continue to see buyers on dips, but I certainly think that the dip is coming. Look at that dip to kick off the week, but by the time we get the jobs report on Friday I anticipate that the market will probably show some type of recovery.
Bottom Line
I see the best likely opportunities in the financial markets this weekasbeing short of the USD/CAD and USD/ZAR currency pairs, and long of gold in USD terms. There may also be short-term opportunities in long trades in the JPY crosses with commodity currencies and the British pound.
Intraday bias in GBP/USD remains on the upside for 100% projection of 1.2298 to 1.2633 from 1.2445 at 1.2780. Firm break there will target 1.2892 resistance next. However, break of 1.2685 will minor support will turn bias back to the downside, for retreat to 55 4H EMA (now at 1.2644).
One of the ways you can use it in your Forex trading is by identifying the current USD tendency. Knowing whether the USD is experiencing an uptrend or a downtrend in value can help you plan your Forex trades accordingly. If the DXY indicates an uptrend in value, it is best to buy the USD against other currencies.
According to our 1 week rating the GBPJPY shows the strong buy signal, and 1 month rating is buy. See more of GBPJPY technicals for a more comprehensive analysis.
GBP/USD is part of a very strong bullish trend. Traders may consider trading only long positions (at the time of purchase) as long as the price remains well above 1.2761 USD.
The strong short-term decline of EUR/USD reinforces the current slightly bearish trend. As long as the price remains below 1.0861 USD, you could take advantage of this bearish acceleration. The first…
The Kuwaiti dinar (KWD) is the world's strongest currency, and this is for a number of reasons. For starters, Kuwait has one of the largest oil reserves in the world.
As a trader, you need to decide whether the currency pair's price will increase or decrease. Based on that decision, you will either take a Sell position or a Buy position. Buy Position: If you think the value of the base currency will increase compared to the quote currency, you'd take a Buy position.
The forex market runs on the normal business hours of four different parts of the world and their respective time zones. The U.S./London markets overlap (8 a.m. to noon EST) has the heaviest volume of trading and is best for trading opportunities.
The best time to trade is when the volume of trades are high – or at an optimal level. There are two different times when trading of GBP/USD is at an optimal level. The first being between 3am – 4am Eastern Daylight Time. The second is at the intersection of the US and European markets.
Most monthly economic data from the United Kingdom comes out between 2 a.m. and 4:30 a.m. Eastern Time in the United States, making this a good time for trading. Central bank interest rate announcements, which usually take place at regularly scheduled times, also have a powerful influence on exchange rates.
By trading the US Dollar Index rather than any one currency pair, investors can spread the risk inherent in the forex market, which is highly volatile, and take a position on broader macroeconomic trends rather than factors specific to one country. You can trade the US Dollar Index (DXY) just like an equity index.
The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies.
The U.S. Dollar Index is used to measure the value of the dollar against a basket of six foreign currencies. These are: the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona.
GBPUSD Price Analysis Expected Scenario The GBPUSD price shows calm bullish bias in attempt to move away from 1.2700$ level, to keep the bullish trend scenario valid for today.
The website forecasts the British Pound to reach a 1.2860 high against the US Dollar in Q4 2024. The British Pound forecast for the next 5 years is neutral, with GBP/USD trading around slightly below 1.23 after trading above 1.24 at the beginning of 2025.
The technical rating for the pair is buy today, but don't forget that markets can be very unstable, so don't stop here. According to our 1 week rating the GBPUSD shows the buy signal, and 1 month rating is buy.
Key British Pound (GBP) Forecast & Price Prediction Summary
While most Pound to Dollar forecasts point toward 1.30 by the end of 2024, other are bearish and forecast Pound to slip below 1.20 against the US Dollar in 6-12 months.
Introduction: My name is Horacio Brakus JD, I am a lively, splendid, jolly, vivacious, vast, cheerful, agreeable person who loves writing and wants to share my knowledge and understanding with you.
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