Friday’s trading was defined by a resurgence of U.S. dollar strength amid a wave of risk-off sentiment. A surprise announcement of hefty tariffs by the U.S. overnight sent shockwaves through markets, slamming risk currencies and boosting the greenback. As a result, GBP/USD, AUD/USD, and NZD/USD all saw sharp intraday reversals from recent highs. Volatility spiked across these pairs, with bullish breakouts faltering and giving way to bearish momentum. Overall, the tone was cautious and defensive – earlier optimism was replaced by swift corrections, fakeouts at resistance levels, and newly established ranges as traders recalibrated to the stronger dollar.
GBP/USD
GBP/USD, 5-minute chart: The pair forms a double top near 1.3610 before a sharp selloff in early Friday trading.
Price Action: The British pound initially attempted to extend its prior rally but failed to break above the mid-1.3600s, forming a clear double-top near the 1.3610 resistance zone. A bullish breakout attempt quickly turned into a fakeout as sellers emerged around that familiar ceiling. Following the tariff news, GBP/USD plunged from its highs, erasing its intraday gains and accelerating to the downside. This abrupt reversal marked a decisive momentum shift – a market that was tentatively bullish flipped to bearish in a matter of hours.
Technical Patterns & Momentum: The rapid turnaround off 1.3610 confirms that level as a strong resistance, aligning with earlier uptrend peaks. Momentum indicators underscore the shift: the pair remains below its 50-period EMA, and the RSI turned down decisively, flashing negative signals. In fact, the continued trading beneath the EMA-50, combined with waning bullish momentum on the short-term charts, reinforced bearish pressure. The double-top pattern at the session high further signals a potential trend reversal. Volatility spiked on the drop, with a long red candle around the London open reflecting stop-loss runs and panic selling after the failed breakout.
Support Tested: The selloff found support just above 1.3500, as the pair dipped into the mid-1.35s before stabilizing. This area – around 1.3520–1.3550 – emerged as an initial demand zone, with buyers stepping in to prevent a deeper decline. It lines up near the psychologically important 1.3500 handle, which had been highlighted as a key support on weekly charts. For now, this floor has held, but it remains under threat if bearish momentum persists. A clean break below 1.3500 could open the door to further downside (with some analysts eyeing the 1.3450 region next).
Resistance Held: On the upside, 1.3610–1.3630 now stands out as a hardened resistance barrier. The twin peaks formed on Friday confirm heavy selling interest in that zone. Bulls would need to push decisively above 1.3630 to regain control – a challenge given the day’s clear rejection. Until that happens, rallies into the high-1.36s are likely to be viewed as selling opportunities. Momentum remains bearish in the near term, so any bounce could be limited beneath this ceiling.
Implications for Traders: Friday’s price action flipped the short-term bias to bearish. The abrupt reversal from multi-day highs could be a warning sign for bulls to be more cautious. Traders may consider tightening stops on long positions or even looking for short entries on weak bounces, given the pair’s inability to hold gains. However, if the 1.3500 support zone continues to hold firm, range-bound consolidation might ensue. In essence, patience is key – a break below support would confirm a deeper correction, whereas stabilization above 1.35 could encourage another run at resistance (especially if broader sentiment improves). For now, the pound’s failure at 1.3610 and the weak momentum signals suggest sellers have the upper hand going into the next sessions.
AUD/USD
AUD/USD, 5-minute chart: A failed breakout at 0.6590 triggers a sharp pullback, but dynamic support contains the decline.
Price Action: The Australian dollar had been in a steady uptrend through most of the week, and this continued into early Friday with an attempt to rally toward 0.6590. In fact, AUD/USD briefly notched a fresh intraday high near that key level – only to stall out almost exactly at 0.6590, a critical resistance identified by technicians. This upthrust quickly lost steam, and the pair reversed lower as sellers defended that resistance. The reversal accelerated during the Asian session risk-off move, with AUD/USD plunging nearly 60 pips from its high. Notably, the drop was swift – a cascade of selling that swept aside minor supports and caught breakout traders off guard.
Technical Patterns & Momentum: The failure at 0.6590 has the hallmarks of a bullish breakout that morphed into a bull trap. Technically, the pair’s inability to close above that hurdle signaled exhaustion. Momentum indicators corroborated the fade: the rally pushed RSI into overbought territory, then negative signals began emerging as the pullback started. The retreat can be viewed as a necessary correction to offload overbought conditions, as AUD/USD had grown overextended. Despite the dip, however, the pair is still trading above its rising 50-period EMA – a sign that dynamic support remains intact and the main bullish trend on the short-term chart is not yet broken. In essence, bulls lost a battle at 0.6590, but they haven’t lost the war; the larger uptrend structure is holding for now, even as near-term momentum has turned more neutral.
Resistance at 0.6590: Friday’s high underscores 0.6585–0.6590 as a formidable resistance zone. This area coincides with prior swing highs and was confirmed by the market’s reaction – multiple tests and rejections. Any upside attempts next will have to contend with this supply zone. A clear break above 0.6590 (on a closing basis) would be required to reignite the bullish trend and open the door toward 0.6630+ targets. Until then, traders should be wary of false breakouts near 0.6590, as evidenced by today’s price action.
Support and Range: On the downside, the pair found support around 0.6530–0.6540 during the height of the selloff. This corresponds roughly to the lower bound of the week’s ascending channel and the top of a previous consolidation from earlier in the week. The swift bounce from that area suggests dip-buying interest. In fact, after the initial panic, AUD/USD rebounded several dozen pips off the lows, recovering back above 0.6570 by mid-day. This creates a tentative range for now between ~0.6530 (support) and 0.6590 (resistance). Traders may see range-bound trading persist into the next sessions if no new catalyst emerges. A break below 0.6530, however, would signal a deeper bearish correction, potentially exposing the 0.6500 level or even the 0.6470 region (near the 50% retracement of the recent rally). Conversely, regaining 0.6590 would put bulls back in control.
Implications for Traders: Caution is warranted after the day’s roller-coaster moves. The critical rejection at 0.6590, coupled with some momentum waning, suggests bulls should be prudent about chasing highs without confirmation. For short-term traders, there may be opportunities to trade the range – e.g., fading rallies near resistance and buying dips near support – until a breakout occurs. The bigger picture still leans bullish (given the overall rising trend and prices above key moving averages), so swing traders might look for signs of a resumption of the uptrend if the pair stabilizes. However, if risk-off themes continue, the Aussie could remain heavy. In summary, 0.6590 is the line in the sand for now – how AUD/USD behaves around this level in coming days will likely set the tone for its next significant move.
NZD/USD
NZD/USD, 5-minute chart: Bearish reversal – the Kiwi fails near 0.6040 and sinks back below 0.6010 amid negative momentum.
Price Action: The New Zealand dollar’s rally attempt on Friday met a fate similar to its Aussie counterpart, but with an even more pronounced bearish tilt. NZD/USD climbed toward the 0.6035–0.6040 area early in the session, approaching a weekly high, but it could not push through this ceiling. With risk sentiment turning sour, the pair then surrendered its gains and went into a steady decline. By the time the dust settled, NZD/USD had fallen well below 0.6010, at one point tagging the upper-0.5980s before trimming losses. Unlike AUD/USD, the Kiwi’s bounces were feeble – any intraday recovery attempts were quickly sold into, resulting in a series of lower highs through the day. This paints a picture of a pair that transitioned decisively into a sell-on-rallies mode as Friday progressed.
Technical Patterns & Momentum: Technically, NZD/USD’s failure at ~0.6040 can be seen as a successful defense by bears at a key Fibonacci retracement / prior high region (notably, analysts had marked 0.6039 as overlap resistance earlier). The pair’s slide from that level gained momentum once it fell back below 0.6000, a round number now acting as short-term resistance. Importantly, momentum indicators flipped bearish: after reaching overbought territory, the RSI showed negative divergence, signaling weakening upside drive. This divergence – higher price highs not confirmed by momentum – foreshadowed the drop and intensified negative pressure on the price. Additionally, NZD/USD’s inability to reclaim its 50-period EMA during rebounds kept the pair under a bearish cloud. In fact, encountering the EMA from below acted like a dynamic resistance, repeatedly capping upticks. With the short-term trend now tilted into a correctional bearish wave, technical biases have shifted in favor of sellers.
Support Zone: The intraday low around 0.5985–0.5990 becomes a critical support level to watch. This area roughly coincides with Thursday’s lows and represents a zone where buyers tentatively emerged on Friday. A clear break below 0.5980 would mark a fresh short-term low, likely accelerating the bearish trend. Below there, the next support may not appear until the mid-0.59s (or deeper at 0.5880, a previous weekly pivot), suggesting room for a sharper fall if the Kiwi can’t hold the line here. Traders will be observing if 0.6000 (now just above current price) flips into a resistance – early signs of that were evident when rebounds struggled to sustain above 0.6000 after the drop.
Resistance and Trend: Upside for NZD/USD now appears limited by the 0.6030–0.6040 region, where supply overwhelmed demand earlier. That zone, along with a slightly lower interim level around 0.6015–0.6020 (the lower high from a midday bounce), forms a near-term resistance band. The short-term trend has turned bearish, characterized by lower highs and lower lows on intraday charts. For the pair to regain a bullish footing, it would need to first climb back above 0.6015, then decisively clear 0.6040 – a tall order without a catalyst. The prevailing downside bias is evident; as one analysis noted, NZD/USD is now under a “bearish correctional trend”, with strengthening negative signals weighing on the pair. Until we see a momentum shift (e.g. an RSI base or a clear reversal pattern), rallies are likely to be short-lived.
Implications for Traders: The Kiwi’s underperformance suggests caution for any long positions. Traders may favor a bearish trading stance in the near term – for instance, selling into strength or using tight stops on any attempted longs. Friday’s action demonstrated how quickly NZD sentiment can sour when risk-off hits, so volatility risk is elevated. That said, if NZD/USD approaches the 0.5980 support again, nimble traders will watch for any sign of stabilization or a double bottom forming, which could provide a short-term bounce opportunity. Otherwise, the path of least resistance appears lower. In summary, NZD/USD ended the week on its back foot, and it will take a clear change in market tone (or a technical reversal signal) to shake off this newly found bearish momentum.
Summary
In the wake of Friday’s dramatic moves, the overall market tone has shifted notably in favor of the U.S. dollar. All three pairs – GBP/USD, AUD/USD, and NZD/USD – pulled back from recent highs and either established or reinforced their short-term downside bias. Key resistance levels (where bullish breakouts failed) have been cemented: the mid-1.36s for GBP/USD, the upper-0.65s for AUD/USD, and around 0.6040 for NZD/USD. Meanwhile, support zones have been tested and identified just above major psychological levels (1.3500 for GBP, 0.6530 for AUD, 0.5980 for NZD). The interplay between these technical zones will guide near-term trading strategies.
Broadly, momentum has swung in favor of the dollar, putting counter-currency rallies on a tight leash. Traders are likely to adopt a more defensive stance heading into next week – keeping an eye on whether this dollar resurgence is a brief news-driven spike or the start of a larger trend. Strategic takeaways: it’s a time to respect support/resistance levels and not chase exuberant moves. If risk sentiment recovers, we may see retracements of Friday’s extremes; if not, those newly established ranges could break, extending the dollar’s advance. In any case, the end of the week provided a powerful reminder of how quickly market dynamics can change, underscoring the need for vigilance and agility in technical trading.