US Dollar Index nears psychological 100 mark as EUR/USD, EUR/GBP slide further
The US Dollar Index is trading at levels last seen in May 2020 and targets that month’s high at 100.60 while the EUR/USD and EUR/GBP continue to slide ahead of France’s Sunday first round presidential election.
EUR/USD is getting ever closer to the $1.0806 March low
EUR/USD is seen sliding for its seventh consecutive day and by nearly 3% from last week’s high towards the $1.0806 early March low as the US Dollar (USD) continues to appreciate following the publication of the March Federal Open Market Commitee (FOMC) minutes which pointed to a rapid balance sheet unwind and faster interest rate hikes to nip surging inflation in the bud.
In view of the speed of the current decline, it is expected that the $1.0806 low will soon be fallen through with the February 2020 low at $1.0778 representing the next downside target. Further down sits the $1.0727 April 2020 low.
Above yesterday’s high at $109.38, minor resistance can be spotted at the late March low at $1.0945 and breached one-month downtrend line at $1.1029. Major resistance remains to be seen between the January low and March high at $1.1122 to $1.1185. While the cross stays below this area, the long-term downtrend remains valid.
EUR/GBP’s swift decline nears £0.8305 to £0.8286 support zone
EUR/GBP’s near 2.5% decline from last week’s high at £0.8512 has taken it very close to the £0.8305 to £0.8286 support area as the Euro continues its slide on worries about Sunday’s first round presidential election in France as polls show that the race between incumbent president Macron and contender Marine le Pen is narrowing.
The £0.8305 to £0.8286 support area contains several daily lows made in January, February and on the 23 of March and as such is expected to hold today. If not, the March trough at £0.8203 would be targeted.
Minor resistance is seen between yesterday’s high and the 55-day simple moving average (SMA) at £0.8364 to £0.8368 and also along the breached one-month support line, now resistance line, at £0.8388. Further up sit the 16 and 25 of February highs at £0.8402 to £0.8408.
The US Dollar Index edges higher towards the critical 100 mark
The US Dollar Index (DXY) is trading in 23-month highs, underpinned by the prospect of a more aggressive pace of US Federal Reserve (Fed) tightening and hawkish remarks from several FOMC committee members who called for faster interest rate hikes to curb surging inflation.
The US Dollar Basket, which has risen for six consecutive days, is about to hit the psychological 100.00 mark, having earlier in the week broken out of its one-month consolidation to the upside. Previously the index had been capped by the 99.29 to 99.45 resistance area but repeatedly bounced off the 97.78 to 97.69 support zone. The former should now act as support.
Further down sits the 22 March high at 98.94 which may also offer support, if revisited at all. Above the 100 mark the May 2020 high at 100.60 represents the next upside target.
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