Bank of America (BofA) has detected a growing trend reversal signal, supporting the strengthening of the US dollar against the major G10 currencies, according to a research note dated June 30, 2025.
The bank’s latest analysis shows a clear trend reversal signal in favor of the US dollar against the euro, Japanese yen, British pound, Canadian dollar and New Zealand dollar. The surge comes on the back of the continued strong US payrolls data, which has triggered a sharp strengthening of the dollar.
BofA also noted that short-term options trends no longer expect a depreciation of the dollar in the near term. In fact, price movements in the options market now show a bullish bias towards the dollar, especially when the current price is considered oversold () by the bank.
From a tactical perspective, BofA has taken a bullish stance on the dollar against the Canadian dollar, expecting a net loss in the Canadian jobs market after four consecutive months of weak labor data. BofA also noted that the USD/CAD pair often experiences large movements when Canadian jobs data is released on a different day than the US jobs data. In addition, the bank is also bullish on the USD/JPY pair, after the CARS model showed Japan exiting a macro shock regime. However, BofA warned that the content of the tariff letter expected to be announced this week could potentially change market sentiment towards the US dollar.
