US Dollar, EUR/USD: How to Trade the ECB Decision, Powell Speech This Week
The dollar index retreated on the last trading day of the previous week. This week, jobs data, along with statements from Fed President Powell, are set to determine the dollar's next move.
Over in the Eurozone, statements following the ECB interest rate decision will drive movements in the EUR/USD pair.
Meanwhile, gold surged significantly after the dollar eased last week, making new 2024 highs.
After last week's data releases on Friday, the market's expectations that an interest rate cut could come in June have increased.
In line with this expectation, the DXY started the new week below this support after retreating by 0.25% to the support zone at 103.8, signaling that the downward trend will continue.
The DXY continues to maintain 103.8 support while continuing its horizontal movement in a narrow band since February 21.
The 103.85 level in DXY continues to be followed as a pivot. While the upward attacks remain weak in the interest rate cut-oriented market, breaking the 103.7 level in the lower region may be a technical sign for the acceleration of sales in the dollar.
The DXY closely tracks the pivotal level at 103.85. While the market leans toward an interest rate cut, a break below 103.7 could signal a technical sign for increased dollar selling.
Fibonacci levels guide our focus on the 103.7 — 103.9 range as a potential support zone for DXY. A potential breakout may lead to 103.3, followed by 102.8 and 102.3, serving as short-term support levels.
Despite the Stochastic RSI indicating oversold conditions due to the recent downward trend, weak dollar demand has hindered upward movement. This week might witness developments that could trigger an upward shift.
On Wednesday, closely monitoring data such as ADP Employment
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