The USD index marginally moved up in the early hours of the European market. It is trading close to the seven-week lower levels due to continued weakness in the US bond yields.
The U.S. Dollar Index Futures against a basket of six currencies slightly declined 0.07% to 91.162. Multipla pieces of evidence suggested that the Federal Reserve might be slower to tighten the monetary policy. Such indications might add further weakness in the US treasury yield and the USD index in the short-term period.
However, yesterday the US dollar index got some support due to the pullback in the global equity index declined from the record high levels due to rising COVID-19 cases globally. This time uncertainty seems to be the best friend for the US dollar; otherwise, all other factors pushing the US dollar towards lower levels.
Based on the technical analysis, the USD index was not able to sustain below 90.7 level and bounce back. So, the 90.7 level seems to be the immediate support zone. Sustaining below the 90.7 levels might lead to further lower levels. However, the top 91.7 level proved to be the key resistance level before it develops the bull flag.
EUR/USD appeared to be in pullback mode over the US dollar recovery following the rising COVID infection globally. J&J vaccine news was not enough to push the Euro rally higher amid a surge in covid cases and the re-imposition of stricter restrictions globally.
EUR/USD pair marginally fell 0.02% to 1.2029 in the early session of the European market. The market witnessed pullback in the pair due to rising uncertainty in the market, which seems to help the US dollar in yesterday’s session. We might witness 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. However, at the lower levels, the 1.1950 seems to be an immediate support zone, before it slides down to lower levels.
The GBP/USD pair is trading above the 1.39 level despite the poor UK CPI data in the morning. However. The UK inflation figure climbed up to 1.1% in March against 0.9% in February. Economic reponing in the UK possibly help the market sentiments to keep higher but appeared to be difficult to hold the grip at the higher levels.
GBP/USD slightly weakened 0.06% to 1.3927 in the early hours of the London opening. The above-mentioned escalating COVID infections and stabilize US treasury yield might add further weakness in the pair in the short-term period.
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.