The US dollar continues its upward trend

April 05, 2021 15:30

For the third consecutive week, the dollar index grew compared to its main competitors, continuing the upward trend in the dollar index that began after marking lows at $89.21 on January 6.

As we mentioned last month, the US dollar has been supported by the increase in the yield of US bonds which, together with the strength shown by the US labour market during the months of February and March, have led this index to exceed 93.00 USD.

Specifically, despite last week being atypical due to the Easter holidays, on Friday we learned the employment data for the month of March, which were not only better than expected, but far exceeded the Market expectations, as the NFPs showed the creation of 916,000 jobs compared to the 647,000 expected. On the other hand, the data from last February was also revised, showing an additional increase of 89,000 jobs, reaching a total of 468,000.


EURUSD analysis

For yet another week, the EURUSD continued its downward trend as the pandemic and lack of vaccines delay recovery in Europe despite the macroeconomic positives during the past week. 

Technically speaking, after bouncing back to the downside after facing its 18-session average forming a double top, the price returned to its 200-session average breaking down at the end of March. The break of this important support level in the red, has led the price to seek its important long-term trend line in the red where it made a bullish rebound. 

The loss of this level could endanger the uptrend and confirm a change in trend, leading the price to seek its next support level in the lower red band or even at the level of 1.15. As long as the price is not able to rise again to its 18-session black average, the sentiment will be bearish.

Source: EURUSD daily chart from Admiral Markets MetaTrader 5 platform from December 18, 2019 to April 4, 2021. Taken on April 4 at 18:50 CEST. Note: Past performance is not a reliable indicator of future results, or future performance.

Price evolution of the last 5 years: 

  • 2020 = + 8.93%
  • 2019 = -2.21%
  • 2018 = -4.47%
  • 2017 = + 14.09%
  • 2016 = -3.21%


GBPUSD analysis

In the GBPUSD, we can see that the pair is following a very clear uptrend since it marked lows on March 20, 2020 around the level of 1.14100 until almost reaching the level of 1.42366, which has led it to exceed its long-term downtrend line (in red dotted) .

As we can see in the weekly chart, after marking highs last February, the price, as in the EURUSD, has started with a correction that has led it to lose the important level of 1.40 to 1.38205.

This downward movement can cause the price to seek its current support levels at the uptrend line and the 18-session black average, thus alleviating the accumulated overbought of recent weeks. As long as the price does not lose either of these two levels, the feeling will continue to be bullish. The loss of these levels would open the doors to a further correction to the previous resistance level in red.

Source: GBPUSD weekly chart from Admiral Markets MetaTrader 5 platform from September 7, 2014 to April 4, 2021. Taken on April 4 at 19:00 CET Note: Past performance is not a reliable indicator of future results, or future performance.

Price evolution of the last 5 years: 

  • 2020 = + 3.10%
  • 2019 = + 3.95%
  • 2018 = -5.54%
  • 2017 = + 9.43%
  • 2016 = -16.26%


USDJPY Analysis

Finally, if we look at the USDJPY, we can see how the Japanese Yen is one of the big losers from the rises in the dollar, and has lost a lot of ground after its last rebound.

As we can see in the weekly chart, after facing its important support level represented by the red band for a long time, the price has definitely bounced above the 200 average in red. The break of this level has triggered a strong upward momentum that has led it to exceed its downtrend line and to reach the 110,650 level again. 

As we mentioned last March, exceeding this level could open the doors to a bullish rally until reaching the upper part of the lateral channel in green.

Source: Admiral Markets MetaTrader 5 platform USDJPY weekly chart from November 2, 2014 to March 8, 2021. Taken on March 8 at 1:05 PM CET. Note: Past performance is not a reliable indicator of future results, or future performance.

Price evolution of the last 5 years: 

  • 2020 = -4.95%
  • 2019 = -0.88%
  • 2018 = -2.76%
  • 2017 = -3.59%
  • 2016 = -2.85%

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