FX markets end the week with some dollar weakness across the board

The dollar sells off into the close as USD/CHF and USD/JPY sell-off into the close.
This all makes for a very interesting lead into next week.

Rajan Dhall, MSTA FX Daily

EUR/USD weekly chart

The EUR/USD weekly chart is coming up to a massive resistance zone. This is not the only FX pair moving to a major level as the other charts in the article point out. Some analysts are pointing out that the dollar sell-off may be overdone. Even since some of these calls have come to market the dollar has still continued to capitulate. The EUR is the best of a bad bunch at the moment. The 27 member group is over the worst of the COVID-19 pandemic for the moment. The Eurogroup also passed the recovery deal which sees some of the worst-hit nations receive some relief money in the form of grants. Next week there is the Fed meeting, US government stimulus decisions and more US-China shenanigans to look forward too.

GBP/USD daily chart

GBP/USD has now broken the trendline to the upside. This is a technically valid trendline as it has more than two touches and a break could mean higher levels are to come. GBP would not be the best currency to chose out of the G6 as Brexit issues are still hanging over the UK like a dark cloud. The economy is still very much in its infancy in terms of the recovery from the coronavirus pandemic too.

USD/CHF weekly chart

USD/CHF is heading to a massive level. We are now very close to the consolidation low after the SNB chose to remove the CHF - EUR peg back in January 2015. The price bounced of the 0.92 level at least four times after the CHF strength following the SNB peg incident. The CHF is a safe haven in nature but the SNB will not look to CHF strength very kindly. In previous occasions, the SNB has been known to intervene in the FX market if the domestic currency gets too firm. This is due to the fact that it will make their exports more expensive.

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

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