USD Index

The USD index weakened further in the early hours of the European market. It slipped to three-week lows due to declining US bond yield following the rising US inflation in March. These concerns are not appearing to be enough to change the federal reserve dovish stance. 

The US dollar index against a basket of six currencies declined 0.10% at 91.750. The U.S. consumer price index soared 0.6% in March against the previous month, which is also 0.1% higher than projected numbers. Furthermore, inflation fear is rising in the market, which might stop bears in the US dollar in the near-term period. However, the US dollar these days is trading parallel to the US bond yield. So, investors need to keep an eye on the bond yield to find further opportunity in the market. 

Based on the technical analysis, the 91.7 level appeared to be an immediate support zone. Where bears might take a break before moving down for further lower levels. Sustaining below 91.7 levels might add further weakness in the index, which could lead the USD index to the 90.2 level in the short-term period.

EUR/USD

Lately, the EUR/USD pair witnessed a three-day successive uptrend in the market following the drop in the USD index. An investor might take a cautious approach to the front of the speeches from the ECB president and the Fed chair Jerome Powell. 

EUR/USD rose 0.21% to 1.19710 in the early session of the European market. Moreover, negatively influenced the US dollar after blocking the use of Johnson & Johnson’s coronavirus vaccines in all 50 US states due to blood clotting issues. Similarly, Europe might also feel the heat in the vaccination programme due to a shortage of vaccine in the near term. So, we might not see the EUR/USD pair hold grip at the higher levels.

Based on the chart pattern, the pair broke the key resistance level 1.1954 in the Tuesday session. So, we might see the uptrend continue in the short-term period. Technically the next immediate resistance might appear around the 1.2014 level. Breaking and sustaining above 1.2014 level might develop further bull flag in the market.

GBP/USD

GBP/USD pair showed to bounce back from 1.37 level in the Tuesday session following the UK GDP growth 0.4% in comparison to the previous month. Moreover, sell-off in the US dollar index following US consumer price index data also helped the pair in the near-term period. 

GBP/USD soared 0.39% to 1.3801 in the early hours of the London opening. The US dollar might remains depressed before the Fed chair Jerome Powell speech, which might give a further edge to the pair before the speech. Moreover, an investor should take a cautious approach around the fed meeting to find the next opportunity. 

Based on the technical analysis, the 1.3854 level appears to be the next resistance zone. If it sustains above 1.3854 level might further see further upside in the pair. But there is a high possibility that it might pull back from the above-mentioned resistance zone. However, the 1.3760 perform to be the immediate support level. Sustaining below 1.3760 levels the pair might develop a further weakness for lower levels.