Market Participants May Be Watching for Room for a Rebound in the U.S. Dollar, Which Is Facing Resistance on the Upside

Market Participants May Be Watching for Room for Recovery in the U.S. Dollar, Which Is Facing Resistance on the Upside

20.05.2025

In U.S. trading the previous day, the U.S. dollar hit its weakest level. The USD/CHF pair fell from 0.8371 to 0.8318. It moved from above the 20-period moving average (MA) on the hourly chart to below it.On the 4-hour chart, a gradual decline along the 20-period moving average continues, while on the daily chart, the price has pulled back from the +3σ level of the Bollinger Bands. We will monitor the situation closely, paying attention to comments from key officials, to see if the U.S. dollar will continue to weaken during today’s U.S. trading hours.

The euro rose against the U.S. dollar after the European Union’s April Harmonized Index of Consumer Prices (HICP), released yesterday, remained unchanged from the previous month’s 2.2%. The euro/dollar exchange rate rose from 1.1167 to 1.1288.The price extended from the centerline of the hourly Bollinger Bands to +3σ. On the 4-hour chart, the 200 EMA acted as support, driving the price higher. On the daily chart, the RSI is rising from around 50. We will be watching closely to see if the euro continues to strengthen against the U.S. dollar.

Today’s economic indicators include the RBA policy rate and statement at 1:30 p.m., a press conference by RBA Governor Block at 2:30 p.m., Germany’s Producer Price Index at 3:00 p.m., the Eurozone’s current account balance at 5:00 p.m.,at 21:30, the Canadian Consumer Price Index; at 22:30, remarks by U.S. Federal Reserve Bank of Boston President Collins;remarks by Boston Fed President Collins, at 23:00 the Eurozone Consumer Confidence Index, at 26:00 remarks by U.S. St. Louis Fed President Musalem, and at 7:45 the following day the New Zealand Trade Balance. We want to carefully assess the upside potential for the U.S. dollar, which is facing resistance.