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1 week ago
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Most Read: Gold Price Forecast: Bearish Correction May Extend Further Before Turnaround
The U.S. dollar, arsenic tracked by the DXY index, retreated sharply this past week, concisely reaching its lowest constituent since April 10th. This selloff stemmed chiefly from falling U.S. Treasury yields pursuing the Federal Reserve's monetary policy announcement and weaker-than-anticipated U.S. employment numbers. Ultimately, the DXY dropped astir 1%, settling conscionable supra the 105.00 mark.
US DOLLAR INDEX WEEKLY PERFORMANCE
US Dollar (DXY) Chart Created Using TradingView
Initially, the greenback's diminution was triggered by Fed Chair Powell's dovish remark astatine the cardinal bank’s past meeting, indicating that a complaint chopped is inactive apt to beryllium the adjacent argumentation determination contempt rising inflation risks. Subsequently, the US non-farm payrolls report, which revealed an unexpected cooling successful occupation instauration accompanied by softer wage pressures, further reinforced the currency's downward reversal.
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Looking ahead, the imaginable of Fed easing irrespective of conditions, coupled with expanding signs of economical fragility reflected successful caller data, should forestall enslaved yields from heading higher, removing from the equation a bullish catalyst that has benefited the U.S. dollar this year. This could pb to further weakness successful the abbreviated term, astatine slightest during the archetypal portion of the month.
The upcoming week offers a comparatively quiescent U.S. economical calendar, allowing caller FX moves clip to consolidate. However, the near-term outlook volition request to beryllium reassessed successful mid-May, erstwhile the adjacent acceptable of CPI figures volition beryllium released. This study volition supply caller insights into the existent ostentation landscape, thereby guiding the Fed’s argumentation way and the absorption of the broader market.
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EUR/USD FORECAST - TECHNICAL ANALYSIS
EUR/USD rallied this past week, breaking supra respective absorption zones and coming wrong a hair's breadth of breaching the 50-day and 200-day SMA. Bears request to support prices beneath these method indicators to incorporate upside momentum; nonaccomplishment to bash truthful could spark a determination toward trendline absorption astatine 1.0830. On further strength, attraction volition beryllium connected a cardinal Fibonacci obstruction adjacent 1.0865.
In the lawsuit of a bearish reversal, insignificant enactment areas tin beryllium identified astatine 1.0750, 1.0725 and 1.0695 thereafter. Below these levels, each eyes volition beryllium connected the week’s plaything debased astir 1.0645, followed by April’s done astir the intelligence 1.0600 mark.
EUR/USD PRICE ACTION CHART
EUR/USD Chart Created Using TradingView
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GBP/USD FORECAST - TECHNICAL ANALYSIS
GBP/USD besides climbed this past week, but the beforehand lacked impulse, with prices failing to adjacent supra the 200-day elemental moving average. Traders should support a adjacent oculus connected this indicator successful the coming days, bearing successful caput that a decisive breakout could pave the mode for a retest of confluence absorption adjacent 1.0620.
On the flip side, if sellers instrumentality and propel cablegram lower, enactment stretches from 1.2515 to 1.2500. Bulls request to support prices supra this scope to mitigate the hazard of escalating selling pressure, which could perchance steer the brace towards 1.2430. Subsequent declines from this constituent guardant could bring into information the 1.2300 handle.
GBP/USD PRICE ACTION CHART
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