USD, EUR/USD & GBP/USD

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US Dollar Index

The USD index moved marginally higher in the early hours of the European market. The US dollar index seems to be recovering following the weakness due to the Federal Reserve Chair Jerome Powell’s testimony that yet again suggested the central bank will take some time to change the monetary policy. This week investors must be eyeing US GDP figures, Initial jobless claims, and PMI data to find further opportunity in the trading.

The U.S. Dollar Index against a basket of six currencies slightly climbed up 0.06% to 91.802 after witnessing a weak Tuesday session following the Fed chair speech. Jerome Powell’s hint to take time before implementing any changes to the monetary policy provided an edge to the major peers of the US dollar. Before making any change, the Fed would like to witness key evidence of inflation and Job market data balance in the economy. Based on these comments the US dollar index took a hit on Tuesday and might struggle at the higher prices in the near-term future. 

This week, US GDP figures and Initial jobless claims data might help to find further impetus in the US dollar against its major peers. Besides these key economic event, US PMI number and consumer sentiments data might also influence the US dollar index movement. US economy is gradually reopening after the pandemic hit, so we might witness growth in the hiring numbers, which could boost the US dollar index in the short-term period. 

US dollar Currency Index analysis
US dollar Currency Index

Based on the technical analysis, the 92.7 level seems to be the immediate resistance level. Sustaining above the 92.7 levels might add further strength to the index, which might lead the USD index to 93.5 levels in the short-term period. However, the 91.14 level proved to be the key support zone at the lower levels.

EUR/USD

The EUR/USD pair edged lower for the first time in the last three days, following the bounce back in the US dollar after the Tuesday hit. The US dollar recovers over the geopolitical issue and escalating COVID-19 delta variant. Moreover, Eurozone PMI numbers will play a key role to set the further trend for the pair. 

The EUR/USD pair inched lower 0.00% to 1.1936 in the early session of the European market. Today, the upcoming eurozone PMI data with positive numbers could add strength to the pair. Moreover, this week investor must be eyeing Germany Ifo Business Climate Index data to find further impetus in the pair. Furthermore, recent geopolitical issue and COVID-19 variant concern might bring some weakness to the pair in the near-term period. 

EUR/USD Euro US Dollar currency pair chart analysis
EUR/USD

Based on the chart pattern, the 1.1954 level seems to be the immediate resistance zone. Sustaining above the 1.1954 level might add further strength to the pair. However, at the lower levels, the 1.1869 level seems to be a key support zone before it slides down to lower levels.

GBP/USD

The US dollar weakness facilitates the bounce-back of the GBP/USD pair from the 1.3800 zones. The GBP/USD pair registered recent gains following the above mentioned Fed chair Jerome Powell. However, current geopolitical concerns and Delta COVID-19 variant worries might break this positive traction in the pair.

The GBP/USD pair climbed up 0.10% to 1.3960 level in the early hours of the London opening. Currently, the key driver of the pair is the UK economy reopening and pandemic concerns. Moreover, the upcoming Bank of England monetary policy could influence the pair in the near-term period. The BoE is expected to keep the interest rates at the same level but might give hint on tapering the bond-buying program. Tapering the bond-buying program will possibly boost the pair in the short-term period. 

GBP/USD GBP chart analysis
GBP/USD

Based on the technical analysis, the 1.3954 level appeared to be the immediate support level. Sustaining below the 1.3954 level might add further weakness to the pair. However, at the higher levels, the 1.4040 level could prove to be a key resistance zone before its moves to the further higher levels.

By Vinay Kumar
June 23, 2021

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