USD Index

The US dollar index marginally climbed up in the early hours of the European market. It appeared to be weak recently following the last week’s drop in the US Treasury yields along with poor job market figures. However, inflation fear is rising, which could help the USD index in the short-term period.

The U.S. Dollar Index against a basket of six currencies slightly moved up 0.09% to 92.243. The Fed chair on Sunday repeatedly stated his dovish outlook to support the economy. Dovish outlook by the Fed might cap the wings of the US dollar in short to medium-term period. 

Moreover, the ultra-easy monetary policy by the Fed might trigger inflation faster than expected. It might create some uncertainty along with US economic recovery. Rising inflation possibly help the US dollar against its major peers. 

Based on the technical analysis, the 92.5 level seems to be the key resistance zone. Sustaining below the 92.5 levels the US dollar looks weak and might lead to lower levels in the near-term period. However, at the bottom 91.7 level appeared to be a key support zone where bears might take a break before moving down for further lower levels.

EUR/USD

EUR/USD pair has started the week on a negative note due to US inflation concerns in the market. Moreover, escalating COVID infections and concern regarding vaccination seems to be putting weight on the Euro against its peers.

EUR/USD declined 0.16% to 1.1877 in the early session of the European market. Today, investors must be eyeing the Eurozone retail sales data for further opportunity. Weak economic data might add further weakness in the pair. 

Based on the chart pattern, the 1.1854 level seems to be the key support zone; however, at the top, the 1.1934 level might play a major resistance role in the near term before it moves further upside. 

GBP/USD

The GBP/USD pair kicked off the week with mixed bags following the rising Inflation worries along with the AstraZeneca vaccine blood clotting concern under 30 years of age group. Such worries about vaccine might halt the successful vaccination programme in the UK. Moreover, such developing concern might delay the re-opening of the UK economy by the government.

The GBP/USD pair rose 0.18% to 1.3733 in the early hours of the London opening. Today, the United Kingdom lifted some partial restrictions with the rule of six to re-open the economy. Initially, the pair is showing positive signs following the optimistic view of the market. But this rise in the British pound might be capped, following the above-mentioned inflation and AstraZeneca vaccine concern.

Based on the technical analysis, the 1.3654 level appears to be the key support zone. If it sustains below 1.3654 level might further weakness in the pair. But there is a high possibility that it might recover from the above-mentioned support zone. However, the 1.3760 perform to be the immediate resistance level. Sustaining above 1.3760 levels the pair might develop a bull flag for the higher levels.