USD Mixed as FX Traders Await Next Breakout in Major Pairs
The US dollar is mixed against major peers as EURUSD remains range-bound between moving averages and USDJPY tightens near multi-year highs, setting up for a breakout.
The US dollar is mixed against major currencies to start the week, with EURUSD and GBPUSD edging higher while USDJPY also ticks up, as traders await a clearer directional catalyst.
EURUSD remains trapped between its 100-hour and 200-hour moving averages, reflecting a neutral short-term stance as buyers and sellers battle for control. The pair's inability to break decisively above or below these levels keeps the outlook range-bound. Meanwhile, USDJPY continues to trade above both its rising 100-hour moving average at 161.71 and the key 40-year high at 161.95. The trading range is tightening, setting up for a potential breakout. Sellers had an opportunity on Friday when the pair briefly dipped below the 100-hour moving average but failed to sustain the move, underscoring persistent bullish momentum.
For currency traders, the current consolidation in major pairs highlights the market's wait-and-see mode ahead of key data releases and central bank signals. The narrowing range in USDJPY suggests an imminent breakout, which could trigger significant volatility in yen crosses. A break above 161.95 would open the door to further yen weakness, while a failure to hold above the 100-hour moving average could signal a reversal. In EURUSD, the moving average squeeze points to a pending directional move, likely driven by diverging monetary policy expectations between the Federal Reserve and the European Central Bank. For real-time pricing on these pairs, check NowPrice's FX page.
Looking ahead, traders will focus on upcoming US economic data, including ISM manufacturing and employment figures, which could provide the catalyst for a breakout. Any shift in Fed rate expectations will be key for dollar direction. On the technical side, a close above 162.00 in USDJPY would confirm bullish continuation, while a break below 160.00 would signal a potential top. For EURUSD, a move above the 200-hour moving average would target the 1.0900 area, while a drop below the 100-hour moving average could open a test of 1.0800.