Should we be watching for upside potential in the U.S. dollar, now that it has become the strongest currency?

Should we be watching for upside potential in the U.S. dollar, now that it has become the strongest currency?

02.05.2025

In yesterday’s U.S. trading session, the U.S. dollar emerged as the strongest currency. The EUR/USD pair fell for the third consecutive day, dropping from 1.1340 to 1.1266. On the 4-hour chart, the price has fallen to the -3σ level of the Bollinger Bands, and on the daily chart, it has broken below the 10-day moving average (MA) that had been providing support and has fallen to just below the 20-day MA. We will be watching closely to see if the U.S. dollar maintains its strength during today’s European trading session.

Among European currencies, the Swiss franc rose against the yen. The CHF/JPY pair climbed from 172.805 to 175.577, rebounding from the 200-period EMA on the hourly chart. On the 4-hour chart, a band walk along the +3σ line of the Bollinger Bands was observed, while on the daily chart, the pair is rising with momentum that is approaching its year-to-date high. We will need to watch price movements during U.S. trading hours to see if the Swiss franc can maintain its strength against the yen.

Today’s economic indicators include Japan’s employment statistics at 8:30, Japan’s monetary base and foreign/domestic securities investment at 8:50, Australia’s producer price index and retail sales at 10:30,at 4:55 PM: German Manufacturing PMI; at 5:00 PM: Eurozone Manufacturing PMI and Eurozone Monthly Report; at 6:00 PM: Eurozone Consumer Price Index and Eurozone Employment Statistics; at 9:30 PM: U.S. Employment Statistics; and at 11:00 PM: U.S. Manufacturing New Orders and U.S. Durable Goods Orders (final). We will be closely monitoring the upside potential of the U.S. dollar, which has become the strongest currency.