We noted last week that the dollar index (=DXY) will rise rapidly to the 105.00 mark as soon as the 104.50 level is reached and exceeded. The 105 treshold should now decide whether or not the dollar will test the 2023 highs again. In the short and medium term, the speech by Jerome Powell about the US economic outlook at the Stanford Business, Government, and Society Forum in Stanford (today), the NFP figures this week Friday and the CPI numbers for March next week Wednesday could provide fresh impetus.
EURUSD -- 1.0776
The currency pair tested the important support level of 1.0724 yesterday. In view of the still valid 1.0724/1.0987 range, euro longs can take their cue from this pivot again. With the heavy economic calendar mentioned above, my overall recommendation remains to use FX Options (hedged) for now. Depending on taste and approach, the 3w to 3m maturities, which have a fairly flat term structure with implied volatilities of around 5.70%, are suitable.
GBPUSD -- 1.2578
The currency pair is trading below the 200-day average line (1.2587). This is not bullish for the pound, but the chart shows that the market has seen key support at the important 1.2500 level since December 2023. In this respect, it makes perfect sense to trade the 1.2500/1.2800 range for as long as it is valid. Below the 1.2500 treshold, however, I would quickly get rid of gbp longs.
USDCHF -- 0.9082
Since the beginning of the year, the dollar has gained more than 8% against the Swiss franc without any real correction. The surprising interest rate cut by the SNB recently led to another rapid 200 pips rise. At least a small correction could start at the upper Bollinger band (0.9148). Nevertheless, I also see the 0.9244 October high, which could act as a magnet in the medium term. In any case, four upward legs are already exceptional.
Good luck,
Sebbo
reminder: my content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances.