Is The USD Back From Vacation?

After almost 18 months of a surging Greenback, it seemed as if the USD took a vacation from its climb the past few weeks and we wondered if perhaps the US Dollar reign had ended. But then this week we saw the USD return from its trip as it started to rally in the direction of strength.

In the wake of a strengthening USD and surging US economy, oil again under pressure, and rumblings from the equity markets means the spotlight is back on the Federal Reserve. If this continues, will this again lead the Fed to interest rate hikes?

The strengthening Yen and its recent bounce may also be giving us the message of a strengthening Greenback, as usually these two work in tandem with each other and strengthen together.

Euro Forecast

The EURUSD is feeling the pinch and with over 200 pips pullback from it’s high of 1.1464 on April makes it a very strong level of resistance. On the downside, a break below the 1.1150 support level is the brick wall and if the EURUSD breaks through, I believe the USD surge will persevere.

Once resistance is broken, I believe we will see a repeat of last February’s almost identical scenario. On February 11th we saw a strengthening Euro, and most analysts believed that this would be a continuing and sustained move. Then, the Euro reversed its gains like a roller coaster and it was smacked down to the low.

Head Fake?

Is the strong USD back from vacation or is it just a head fake before the next jump upwards? The next few days will be critical across the Forex market and early in the week, beginning on Monday April 18th we should see some clearer direction and will be reflected in our Forex Signals. I have that feeling the mighty Greenback is about to flex its muscles again, but of course time will tell.