US Dollar Index
The USD index weakened in the early hours of the European market. The US dollar seems to be trading in a tight trading range in the last couple of days. Furthermore, the recent release of soft U.S. inflation data boosting uncertainty over whether the Federal Reserve will possibly begin its stimulus extraction this year or not. Where stimulus withdrawal might have a positive impact on the US dollar index against the major peers. This week all focus will be on the US initial jobless claims along with retail sales data to find further impetus in the trade.
The U.S. Dollar Index against a basket of six currencies sided 0.16% to 92.463. On Tuesday, session U.S. inflation numbers for August appeared to be lower than expected. The core consumer price index, which disregards the unstable food and energy factors, moving up just 0.1% last month. This suggested that the upward pressure on inflation was starting to fade. So, the declining inflation pressure could influence the Fed tapering decision in the coming meetings. In addition, in the near-term period, the US dollar might not survive at the higher rates following the rising crude oil prices.
Based on the technical analysis, the 92.7 level seems to be the immediate resistance level. So, sustaining above the 92.7 levels might add further strength to the index, which could push the USD index to 93.5 levels in the short-term period. So, the 93.5 could prove to be a key resistance zone before it moves to higher levels. However, at the lower levels, the 91.14 level proved to be the key support level.
EUR/USD
The EUR/USD pair witnessed to be pressured by concerns about the global economic recovery. However, Hopefulness about the European recovery will most likely keep the Euro bid. The above-mentioned weak US CPI numbers help the pair to gain some momentum since the Tuesday afternoon session. This week all eyes will be on the Eurozone CPI numbers to find the further pattern in the EUR/USD pair trade.
The EUR/USD pair soared 0.22% to 1.1829 in the early session of the European market. The EUR/USD pair on the four charts seems to be painting mixed pictures for the investors. All investors’ must be eying on the next calendar ECB meeting to find further opportunities in the pair. Moreover, the COVID-19 cases are declining in the Eurozone, which could boost the Euro in the near-term period.
Based on the chart pattern, the 1.1869 level seems to be the immediate resistance zone. Sustaining below the 1.1869 level might add further strength to the pair. However, at the higher levels, the 1.1764 level seems to be a key support zone before it moves further to lower levels.
GBP/USD
The GBP/USD witnessed a rebound from a short-term rising trend-channel support following the positive Tuesday session. The GBP/USD pair built the movement on its steady intraday positive through the first half of the European session. This week key economic events such as UK CPI and retails sales data should be closely monitored to find further opportunities.
The GBP/USD pair moved up at 0.20% to 1.3836 level in the early hours of the London opening. The British pound boosted following the release of positive UK consumer inflation figures. On the other hand, the US dollar bulls stayed cautious due to fading hopes for the Fed taper announcement at the upcoming meeting in September. So, in the near-term period, we might witness a positive movement in the pair.
Based on the technical analysis, the 1.3869 level appeared to be the immediate resistance level. Sustaining above the 1.3869 level might add further strength to the pair. However, at the lower levels, the 1.3814 level could prove to be a near-term support zone before it slides further lower side.