The USD index declined furthermore in the early hours of the European market. The US dollar index is declining despite the market witnessed marginal growth in the US treasury yield and bond yield in the opening Asian session.
The U.S. Dollar Index against a basket of six currencies declined 0.10% to 90.990. Lately, the US dollar index plunged 2.5% from its five-week high. Some investors are hoping for the Fed to come into action and change their dovish stance, which seems highly unlikely in the current situation. So, we might witness a further decline in the US dollar index against its major peers.
Moreover, another reason for weakness in the USD is rising stability in the major economies following the improving vaccination drive along with the drop in the COVID infections. For example, The Euro is rallying on the successful vaccination rollout after witnessing multiple problems in the past.
Based on the technical analysis, the 90.7 level seems to be the immediate support level, where the bear might take a breath. Sustaining below the 90.7 level, possibly add further weakness, which could lead to a 90.14 level in the near-term period. However, the top 91.7 level proved to be the key resistance level before it develops the bull flag.
EUR/USD pair is extending its gains mostly motivated by the constant decline in the USD and the Eurozone COVID vaccine positiveness. So, the Euro is rallying on the successful vaccination rollout after witnessing multiple problems in the past.
EUR/USD pair climbed up 0.27% to 1.2065 in the early session of the European market. It might continue its rally following the USD decline. Moreover, prospects of a swift Eurozone’s economic recovery following the vaccine hopefulness reflated the rise in the German bond yields, which is extending further encouragement to the Euro. In the next two days, we might see a cautious approach in the market before the Eurozone monetary policy meeting to find further opportunity.
Based on the chart pattern, the 1.2154 level appeared to be the key resistance zone at the higher levels, where bulls might pause for a while. Sustaining above the 1.2154 level might add further strength to the pair.
GBP/USD pair has dominated the 1.40 level over ongoing weakness in the USD. Furthermore, the British pound is possibly getting support from economic reopening along with a successful vaccination drive.
The GBP/USD pair moved up 0.18% to 1.4003 in the early hours of the London Opening. In the morning, the UK unemployment data supported the rally in the British pound. The UK Unemployment figures surprised with the decline to 4.9% against to 5.1% the projected figure in the market. Moreover, further relaxing the lockdown stages will improve the condition. However, it might be difficult for the British pound to hold the grip at the high levels. Because the USD possibly bounces back due to strong economic result in further following the economic stability.
Based on the technical analysis, the 1.4040 level appeared to be the immediate key resistance zone. Sustaining above the 1.4040 level might add further strength in the pair following the positive economic figures. However, at the lower levels, 1.3860 might play a key support zone in the short-term period.