Major Pairs Technical Analysis: USD Weakness, Levels, Trade Approach

Market Overview: Volatility & Key Trade Setups

The U.S. Dollar continues to weaken, fueling momentum in major foreign currencies. Western markets face heightened volatility due to trade wars and economic concerns, shifting focus to European and Oceania pairs. Here’s a breakdown of the technical outlook and potential trade setups:

USD: Micro Breakdown, Watching 103.221

• 4H: Rebounding at 103.573 - 103.678 FVG, but remains below the MA.
• 1H: A breakdown targets 103.221, favoring foreign currency strength.

AUD & NZD: Bullish Continuation

• AUD: Broke 0.63640, targeting 0.64084; pullback buy zones at 0.63537 - 0.63784.
• NZD: Cleared 0.57722, watching 0.57923 - 0.57706 for re-entries.

EUR & GBP: Strong Uptrend

• EUR: Eyes 1.09470, support at 1.08870 - 1.08961.
• GBP: Broke highs, targeting 1.30478, pullback at 1.29461 - 1.29665.
• EURGBP: Euro outperforms GBP as EU defense budgets rise.

USDCAD & USDCHF: Avoid Until Breakout

• USDCAD: Tariff risks keep it range-bound.
• USDCHF: Sideways movement favors long-term shorts.

For previous forecasts, check out my market analysis contents:

https://acy.com/en/market-news/market-analysis/

https://acy.com/en/market-news/market-analysis/usd-weakness-continues-technical-outlook-j-jo-100649/

https://acy.com/en/market-news/market-analysis/usd-losing-its-grip-j-o-02172025-114151/

Major Pairs Technical Outlook

USD: Broke Micro Range with Potential Macro Breakdown

4-Hour

USD has broken down of the the micro range and currently rebounding at the 103.573 - 103.678 Fair Value Gap level.

We also below moving average, something not yet that significant unless we are now in a trending condition.

1-Hour

If we create a range on that Fair Value Gap mark and break down, we can look to trade against the Dollar with a target of 103.221 level.

A continued Dollar weakness and breakdown could further propel foreign pairs to the upside.

AUD: Steady Momentum with New Highs Ahead

Daily

Aussie already broke out of the 0.63640 level with 0.64084 target ahead.

4-Hour

Potential pullback level opportunity for long is the 0.63537 - 0.63784 Fair Value Gap level with support confluence of either the Moving Average 20 or 50.

1-Hour

We can also plot the Fibonacci with bounce levels at 0.618 - 0.79 for added confluence.

Approach:

• Wait for the pullback to slow down by creating a range.
• Wait for a breakout of the range to the upside.

NZD: New Highs as Momentum Increases

Daily

We now have successfully broken out of the 0.57722 as forecasted. We are looking for potential upside and new highs as the US Dollar slumps.

4-Hour

Pullback levels for longs:

1. 0.57923 - 0.58144 Premium Level with 23.6 - 38.2 Fibo
2. 0.57628 - 0.57706 Discount Level with 61.8 - 79.0 Fibo

AUDNZD: Which is the better long?

With AUDNZD going down and USD on a slump, NZD is the better long as it will perform will vs AUD.

EUR: Imminent Breakout at 1.09470

Daily

EUR continues to get steam as European market increases appeal over the US markets.

4-Hour

Potential Bounce Level:

1. 1.08870 - 1.08961
2. 61.8 - 79.0 Fibo
3. 20 Moving Average

GBP: 1.30478 Target Insight

Daily

Pound continues to benefit the European appeal together with EUR.

We are looking for a target at 1.30478 level as we already broke out of the recent high.

4-Hour

Potential Bounce Level:

1. 1.29461 - 1.29665
2. 50.0 - 61.8 Fibo
3. 20 Moving Average

EURGBP: Which is the better long?

Daily

EURGBP is in an obvious upside as we are trading above the moving averages, and we are in a bullish sequence favoring strength on EUR.

In this case, as long as we don’t break the lows of the range and invalidate the moving average, EUR will perform better for upside vs GBP.

Another fundamental to note for EUR strength is bumping up of defense budgets on EU, with Germany leading the pack with France and Italy following the lead for 2nd and 3rd respectively, benefitting EUR.

USDCAD: Remains Sluggish Amidst Tariff Wars

Daily

With tariff wars between US and Canada, USDCAD is not an ideal trade for short to medium term holding.

4-Hour

Unless we breakout or breakdown of the range, USDCAD remains to be “not ideal” for long holdings.

It’s hard to trade a market with intense turmoil between the 2 markets as risks are also heightened.

USDCHF: No Developments with Price Action, Still on Sideways

4-Hour

Unless USDCHF breaks out of its current range, it will likely continue to whipsaw positions. A long-term short is a more favorable approach than intraday trading.

Upcoming Risks: Volatility Ahead

A pause in rate hikes typically weakens the U.S. Dollar due to:

• Lower Yield Appeal: Investors seek higher-yielding currencies, reducing USD demand.
• Weaker Economic Confidence: A pause signals economic concerns, discouraging capital inflows.
• Stock Market Boost: Funds shift from cash to equities, lowering USD demand.

However, if the Fed hints at future hikes, the USD could stay supported. Conversely, talk of rate cuts could accelerate its decline.

Technical Approach: Trading with Precision

In the current market environment, volatility in Western markets due to trade wars and economic concerns makes European and Oceania currencies more attractive. To navigate these conditions effectively, a disciplined approach is necessary—focusing on key technical levels, aligning trade confluences, and managing risk. Here’s how to refine your entries and maximize trade potential:

1. Prioritize European and Oceania currencies 
   • Western markets remain volatile due to trade wars and economic uncertainty.
2. Trade Entry Strategy: Wait for Key Levels 
   • When price bounces off key levels, follow these steps: 
     1. Confirm the Setup 
        • Look for sideways consolidation on intraday timeframes (1H, 4H).
        • Wait for a breakout before committing.
     2. Align Confluences to improve trade probability.
     3. Set Stop Losses Below the Range 
        • Ensures optimal stop placement.
        • Allows price room to breathe.
3. Map Out Potential Target Levels 
   • Previous Day’s High
   • Previous Week’s High
   • Previous Session’s High
4. Trade with the Trend—Not Against It
   • Price remains above the moving average—avoid counter-trend trades.
   • Markets can rise or fall beyond expectations; trade what’s proven, not assumptions.
5. Risk Management Is Key 
   • The market is always right—your job is to manage risk, not predict outcomes.

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