Technical Outlook: USD Seeks Traction Amid Global Volatility

Overview:

USD: Stuck in a Range

• Trading sideways, awaiting a catalyst; bullish above 106.789, bearish below 106.126.

VIX: Market Uncertainty Rises

• Spiked to 18.50, triggering a sell-off in Bitcoin, Dow, Nasdaq, and S&P.

JPY: Strengthening Against USD

• Yen gains momentum; USDJPY tests 148.643 support, a break could trigger further downside.

AUD: Bearish Trend Confirmed

• Broke below 0.63275, pressured by aluminum oversupply risks and weak sentiment.

NZD: At Key Support

• Hovering at 0.56775, potential breakdown unless 0.57210 is reclaimed.

EUR: Weak Amid Trade Concerns

• Losing influence in global trade; breakdown of 1.04462 could accelerate downside.

GBP: Holding Strong Amid EU Weakness

• Resilient due to UK’s 3% GDP defense spending; key support at 1.26352 - 1.26056.

CAD: USD Gaining Momentum

• USD breaking out as CAD faces tariff risks; bullish confirmation above 1.43791.

OIL: Breaking Down

• Dropped below $70.126, further downside likely below $68.279.

CHF: Holding Strength, But Indecisive

• Swiss Franc remains firm, waiting for a breakout to determine direction.

Dollar Trying to Gain Traction

The Dollar remains in an indecisive phase, moving at a slow pace without clear direction.

On the 4-hour timeframe, USD continues to trade sideways since Monday, lacking momentum in either direction. A strong catalyst is needed for price to break out of this range.

Potential Catalyst for USD

A positive economic reading could provide a boost to the USD, signaling that despite inflation and lower employment, the U.S. economy remains resilient and capable of recovery.

Key Technical Levels to Watch

Bullish Scenario:

• A clean break above 106.789
• A break of 106.746 - 106.879
• A move beyond 107.381 (confirms a trend shift)

Bearish Scenario:

• A clean break down below 106.126
• Target at 105.420

For now, USD remains in a neutral phase within the range. Ideally, we want to participate in the market once a clear directional move is confirmed. Overall, the bias remains bearish, with no evident signs of a reversal yet.

VIX Spikes for Four Consecutive Days

The VIX has surged, reaching 18.50, signaling increasing market uncertainty due to geopolitical risks.

• Risk-On: Below 20 – Investors take on more risk.
• Risk-Off: Above 25-30 – Volatility spikes, and investors move to safe-haven assets.

This uncertainty has caused a broad market shake-up:

• Bitcoin dropped to $82,000
• Dow, Nasdaq, and S&P lost 1,200, 1,000, and 200 points, respectively, leading to a global sell-off.

Yen Strengthens Against the Dollar

The Yen continues its upside momentum, testing the 760.5 level for a potential breakout.

If this breakout occurs, major currency pairs (USD, GBP, EUR, AUD, NZD, CAD, CHF) against the Yen could face further downside.

USDJPY: Testing Key Weekly Support at 148.643

Daily

The Dollar remains indecisive, while the Yen continues its bullish momentum. USDJPY is currently testing support at 148.643, which could lead to further downside.

4-Hour

A break below this range could trigger a stronger move downward. The next catalyst for USD strength or weakness will determine whether this level holds or breaks.

AUD: Breaks Trend Shift Line at 0.63275 – More Downside Ahead?

Daily

The Australian Dollar has broken below the 0.63275 trend shift level and previous support at 0.63305 - 0.63079, signaling potential further downside.

Aluminum Oversupply Risks Impact AUD

Australia’s aluminum exports (-5% of GDP) face risks as Russia’s proposal to supply 2M tons of aluminum to the U.S. could stabilize global prices and counter previous U.S. tariffs.

4-Hour & 1-Hour

AUD remains in bearish territory, currently at a discount level where a bounce could occur.

Key Technical Scenarios:

• Bullish: Needs to hold the 61.8 - 79.0 Fibonacci level and form higher highs & higher lows.
• Bearish: A full breakdown of this zone and a break below 0.62547 could confirm a further downtrend.

NZD: Nearing Support – Imminent Breakdown?

Daily

NZD is hovering near key support at 0.56775, with a potential breakdown looming.

1-Hour

A break above 0.57210 is needed for an upside reversal, but as of now, NZD lacks strength.

EUR: Stuck in a Range Amid EU Trade Concerns

Daily

The Euro remains range-bound and vulnerable to geopolitical risks, weakening its global appeal.

EU Losing Influence in Global Trade

RUB and USD could stabilize on trade optimism; EUR may lag if EU loses influence in resource markets. EU loses rare earth leverage as the US and Ukraine agreed over 50% mineral share deal. EU was also excluded from US-Russian deals ousting EU from a global competitive advantage.

4-Hour

A breakdown of 1.04462 level could trigger a downside move to the 50%-75% level of the range.

GBP: Holds Strong Amid Eurozone Tensions

Daily

GBP is still being seen as resilient compared to EUR, as EU has not been that appealing when it comes to political partnership with US, Russia and other European countries like Ukraine.

UK also pledges to raise defense spending to 3% GDP which made GBP on the rise.

4-Hour

GBP is at an order block, suggesting potential support. A break below 1.26352 - 1.26056 could invalidate bullish momentum.

CAD: Range Breakout in Favor of USD

Daily

The US Dollar is gaining momentum against the Canadian Dollar as tariff concerns over CAD begin to take effect. While Canada faces potential trade restrictions, a complete economic shutdown with the US is unlikely.

Additionally, the invalidation of the Daily Fair Value Gap suggests a lack of bearish continuation, reinforcing USD strength.

4-Hour

A decisive break above 1.43791 could signal further upside for the USD, potentially leading to a sustained bullish move.

OIL: Tariff-Driven Breakdown

4-Hour

Oil has weakened following tariff-related pressure on CAD, breaking below the $70.126 support level.

A further break below $68.279 could extend the downside, with potential targets around $64.743.

CHF: Swissie Holds Strength Against USD – But for How Long?

Daily

4-Hour

For now, price action remains indecisive within the current range. A confirmed breakout will determine the next directional move.

Key Takeaway:

The Dollar remains in a neutral phase, but tariff pressures, trade shifts, and risk-off sentiment could fuel its next move.

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