USD Forecast Against Major Currencies For 2023

Before we jump into technical analysis and charts, we will need to analyze global fundamental tendencies to see a clearer picture, and then we can determine the best possible scenario for each USD major pair. 

Forex Fundamental Analysis

Let’s see the fundamental analysis first as Europe seems to fight back the energy crisis with success. It is going to affect the Euro positively in 2023. Winter is about to be over and all following months will be warmer, making energy demand slowly decline when compared to winter. This will allow major countries to slowly fill up their oil reserves again for the next winter and will likely cause the Euro to strengthen against USD. The US Fed is going to continue interest rate hikes until inflation is at controllable levels. But the US has hit the ceiling for government debt, making investors lose confidence in USD strength, further amplifying other major currencies’ strength. It is likely that other major currencies will hold their ground against USD in the short to medium term. 

EURUSD 2023 Prediction – Book Level Nice Uptrend Continuation

If we look at the EURUSD chart on a daily timeframe, it had a nice upward movement in Feb. that started from Nov. 2022. The 50-day moving average seems to describe the trend nicely, and the price seems to respect the dynamic level provided by the indicator. The uptrend is likely to continue if we take into account that this winter was warmer and the energy crisis seems to reside slowly in Europe. If we take into account other fundamental aspects mentioned above, the uptrend seems almost inevitable in the short to medium term.  Price will continue to test the local dynamic and status support levels at the 1.070 zone and will decide what to do next afterward. So this will be a very important level to watch closely.

GBPUSD 2023 Review – Is The Uptrend Really Over?

Similarly to EURUSD, the GBPUSD pair was in an uptrend that was almost violated recently, but the pair started to move upward making higher lows but failing at higher highs. Since fundamentals are against USD strengthening, we could see a nice upward trend movement and the price could bounce off from the 1.242 zone. 1.2020 and 1.24 could be a nice channel for GBPUSD where the price bounces several times before it finally decides where it wants to move. This channel sideways movement is going to be a good, predictable, and profitable movement for experienced traders. 

USDJPY 2023 Review – Downtrend Continuation Is Likely

Like other major pairs, JPY, too, was fighting back against USD starting from Oct. 2022 to this day. Currently, the price is testing dynamic and static resistance levels of the 132 zone. We shall see if JPY is ready to take another successful battle against the world’s reserve currency after testing this zone. From the charts and fundamentals, it seems obvious the price wants to continue moving down, and there are not many reasons for it to behave otherwise as of now. In the short to medium term, it is highly probable that USDJPY continues downtrend movements.  

USDCHF 2023 Tendencies – What A Mess Of A Downtrend!

There are a few things in Forex that never change. It is impossible to predict the future and USDCHF is going to be messy, choppy, and chaotic. The only sure thing with this pair is that the level at 0.94 seems very powerful, and traders are suggested to exercise extra caution when the price is around that level. If the price continues upward movement, then 0.94 is the next major resistance level to beware of. There is not much logic that can be predicted here. From a fundamental standpoint, it is hard to determine the future of USDCHF too. The main idea is USD is going to weaken against CHF as well. So, the bearish signals are going to be more accurate in general than bullish ones. In the long run, the downtrend seems more probable to continue, but the pair will test the 0.94 resistance zone first and experienced traders could follow the price till this zone.

Key Takeaways

The US has hit the ceiling for its government debt and shaken investor confidence in its currency. This had major implications for USD pairs. All major currencies seem to strengthen against the dollar as Europe’s energy crisis is softening because of warmer winter and coming spring. All major pairs have a common characteristic of the dollar weakening in 2023’s first quarter. We shall see how the US solves the government debt crisis, as it will affect the major pairs the most. EURUSD is in an uptrend and is currently testing the 50-moving average dynamic support. It has more chances of continuing a bullish trend. GBPUSD is in a similar situation except it has formed a channel and if the price continues to be bullish, traders should watch the 1.24 zone carefully. USDJPY is in a downtrend and is now testing the dynamic and static resistance levels at the 132 price points. If it fails to break out of this zone, a strong bearish move is highly likely. USDCHF is in a choppy situation and is moving upwards to test a powerful level at the 0.94 test, after which we will see if Frank has the power to stand its ground against the dollar.

Sources:
https://www.axiory.com/
https://www.bbc.com/news/business-64322574
https://www.reuters.com/business/environment/feels-like-summer-warm-winter-breaks-
temperature-records-europe-2023-01-04/