USD Index

The USD index witnessed weakness in the early hours of the European market opening following the benign inflation data and drop in the US treasury yield. Today all eyes on the European Central Bank meeting, so we might see a cautious approach adopted by investors before the meeting.

The US Dollar Index against a basket of six currencies plunged 0.28% at 91.575 following the week Consumer Price Index data on Wednesday. Moreover, the US stimulus final approval from the House of Representatives might lead to higher inflation.

All these above-mentioned factors might not help the US dollar to hold a tight grip on higher levels. Based on the technical analysis, the 92.50 level proved to be a major resistance zone. US dollar index failed to hold and sustain above 92.50 levels. However, at the bottom 91.140 proved to key support level before it slides further down. 

EUR/USD

Today, the Euro is in the spotlight following the European Central Bank meeting. The market is hoping that ECB might intervention to limit the upsurge in bond yields. If ECB disappoints the market, then we might witness another surge in the bond yield, which will be bullish for the Euro in the short-term period. 

EUR/USD soared 0.31% to 1.1963 in the early session of the European market in advance of the European Central Bank latest policy-setting meeting. According to us, the higher bond yield might be in focus, even though recent strength in the Euro is no longer a tenacious issue.

Based on the chart pattern, immediate resistance at higher levels should be 1.2014. Sustaining above 1.2014 levels might develop a bull flag for further higher levels. 

GBP/USD

GBP/USD moved marginally up 0.05% to 1.3937 in the early session of the London opening. The pair have registered successive three-day rise and trading close to its immediate resistance level of 1.3954. Sustaining above 1.3954 levels it might set for further higher led in the coming days. 

This strength in the British pound has witnessed due to a drop in the US treasury yield and yesterday’s poor US CPI data. Moreover, along with the ECB meeting market will be keenly waiting for US initial jobless claims data; which is due in the afternoon. Another negative US data might add a further boost to the GBP/USD.