As Thursday dawned, global currencies were thrown into turmoil. The US dollar slumped to multi-year lows, propelling the euro and British pound into sharp rallies. This wild swing came amid swirling rumors of geopolitical unrest and central-bank unease – a lethal cocktail of uncertainty. Traders noted whispers of a Middle East ceasefire, dovish Fed signals, and even political intrigue in Washington driving the dollar’s fall. In these conditions, chart breaks happened fast: every breakout in the major pairs was met with an equally violent retracement, as markets now flip from euphoria to panic on a dime. Key highlights from Thursday’s action include:
- US Dollar (DXY): The DXY index plunged below ~97.70, a multi-year trough, as Treasury yields eased and risk appetite rose.
- EUR/USD: Blasted above 1.1700 (highest since 2021) on the dollar’s collapse, then pulled back to ~1.1680 by London open.
- GBP/USD: Leapt through 1.3700 to ~1.3720 in the overnight session, briefly touching fresh highs before easing back toward 1.3700 by Thursday morning.
- USD/CAD: Climbed to ~1.3750 on Wednesday, then reversed sharply—testing support around 1.3700 as oil prices tumbled. A late bounce off 1.370 suggests that level is critical support.
These moves reflect sudden shifts in momentum. After reaching resistance, each pair snapped back under profit-taking. For example, the euro’s breakout faded as traders queued to lock gains, and sterling gave up a chunk of its overnight surge as soon as Europe opened. Behind the scenes, analysts pointed to mixed central-bank rhetoric and unverified headlines as catalysts. (One report even noted the dollar “lost more ground” on Thursday, with EUR/USD hitting 2021 highs, as global tensions cooled and Fed Chairman Powell sounded cautious.)
EUR/USD
The EUR/USD chart captures a dramatic move: just after midnight GMT, the euro exploded above 1.1650, tearing through its recent trading range and spiking toward 1.1715. As one preview noted, “EUR/USD climbed to new 2025 highs above 1.1650” amid the greenback’s retreat, a phenomenon clearly visible here. This surge was fueled by the dollar’s broad weakness and speculative bullish momentum. However, the break didn’t last long.
By Thursday’s European morning, EUR/USD had given back most of those gains, testing support near 1.1680. The chart shows a classic blow-off top: after the overnight rally, sellers stepped in hard once the breakout stalled, dragging prices back toward yesterday’s levels. Traders cited fading safe-haven demand (rumors of easing Middle East tensions) and a lack of fresh euro-friendly news as reasons for the reversal. The intraday swings on this chart highlight how quickly sentiment has flipped – bullish breakouts are now immediately vulnerable to abrupt reversals.
Watching EUR/USD now, key resistance is around 1.1700 and immediate support at ~1.1680. Analysts warned that central-bank caution could cap any further advance, so the 1.17 barrier is now the focal point.
GBP/USD
The GBP/USD chart tells a similar story of a breakout-and-reverse. Cable shot higher in the early London hours, punching well above 1.3700 – in fact the overnight highs approached 1.3720. This move extended Wednesday’s rally (BoE speakers and data had already sent GBP past 1.3655), as the global dollar rout held sterling afloat. But like EUR/USD, the peak was short-lived. As soon as European markets opened, traders began offloading positions.
The chart shows the rally stalling right at the 1.3720 area and then pulling back to ~1.3700. By late morning, GBP/USD was consolidating just above that level. Market chatter blamed this foray partly on short-covering in the thin overnight London market, and partly on warnings from UK officials that inflation risks remain. In sum, the chart’s candles reflect a classic intraday reversal: a violent surge into new ground followed by a retreat under renewed dollar demand.
Whether cable can hold above 1.3700 will be crucial; for now that round number has flipped roles from resistance to (fragile) support. Traders noted that sterling’s advance was technically impressive but also “nearly snapped back” once momentum wavered.
USD/CAD
The USD/CAD chart shows almost the opposite pattern: Wednesday’s high near 1.3750 evaporated overnight. As crude oil slid (WTI is about $12 below June’s peak), the loonie strengthened. USD/CAD plunged through mid-1.37s late Wed, testing 1.3700 repeatedly on Thursday. That 1.3700 level, highlighted on the chart, acted as critical support; a Norwegian-shaped bounce in the early London morning shows buyers defending it. Commentary had noted that CAD was “pinned to 1.3700” due to weak oil and lacklustre data. Indeed, the chart’s sharp “V” move – down and then half-back up – mirrors that story.
In practical terms, sellers failed to push USD/CAD much below 1.3700, and by the close it was stuck around 1.3710. This suggests the Canadian dollar’s rally may have been overdone, given the day’s volatility. If 1.3700 gives way decisively, it could signal a deeper USD bounce; if not, the rebound sets up CAD to resume its fall. Today’s candle wick shows traders quickly covering shorts once 1.3700 held, underscoring how oversold conditions were met by bargain-hunting. The looming question is whether this level holds or crack – the chart says it’s a lynchpin for tomorrow’s direction.
Market Outlook
The charts end the week on a knife-edge. With the euro and pound racing higher, traders will be on alert for any hint of reversal. As one strategist cautioned, a stronger dollar “could reemerge if US data surprises or geopolitical calm fades”. Friday’s calendar is packed: final Q1 GDP and inflation measures, plus several Fed officials speaking. A better-than-expected US report or hawkish twist could yank the dollar back to life and send EUR/USD and GBP/USD tumbling. Conversely, any fresh unrest abroad or new dovish noises (e.g. a shaky Powell appearance) might keep this rally alive.
Key levels to watch are now 1.1700 on EUR/USD and 1.3700 on GBP/USD – both proved pivotal Thursday. Ultimately, traders know these spikes are fragile: a single surprise (a gas pipeline newsflash, a political bombshell, even a blip in oil supply) could ignite a swift counter-rally. All eyes are on late-week catalysts as markets brace for another violent session – will the dollar rebound and reclaim lost ground, or will the “flight to risk” fuel yet more upside in the euro and pound? Analysts agree: tomorrow’s open could be just as explosive as today’s.