US Dollar Wobbles as Markets Await Powell; More on EUR/USD, GBP/USD, USD/CAD

By Daniel M.

March 5, 2024   •   Fact checked by Dumb Little Man

US Dollar Outlook – EUR/USD, GBP/USD, USD/CAD

Source: DailyFX

At the week’s onset, the U.S. dollar showed a varied performance against major currencies. Despite some gains, it fell against others, even as U.S. Treasury rates rose. Normally, higher yields make the dollar more attractive, but the expected correlation faltered.

Market participants showed caution, wary of taking clear stances ahead of a busy economic calendar. This week is loaded with events like ISM services data, Powell’s Congressional testimony, and the U.S. NFP report, all potentially heightening market volatility.

Powell’s testimony could pivot on his stance regarding monetary easing. Recent inflation indicators suggest a slow pace of disinflation, hinting at no rush for rate cuts. A hawkish surprise from Powell could boost yields and, by extension, the dollar’s strength.

The analysis shifts to a technical perspective on EUR/USD, GBP/USD, and USD/CAD. This section delves into price movements and important support and resistance levels.

EUR/USD Forecast

Source: EUR/USD Chart Created Using TradingView via DailyFX

EUR/USD approached its 50-day SMA at 1.0860. A break above this could lead to a move towards February’s peak near 1.0900, with 1.0950 as the next target. On the downside, key support is at 1.0835, near the 200-day SMA, with potential dips to 1.0800 and 1.0725.

GBP/USD Forecast

Source: GBP/USD Chart Created Using TradingView via DailyFX

GBP/USD surpassed its 50-day SMA at 1.2675. Further gains might encounter resistance at 1.2710, and beyond, at 1.2830. A bearish shift could find support at 1.2675 and 1.2615, with a significant drop eyeing the 200-day SMA at 1.2575.

USD/CAD Forecast

Source: USD/CAD Chart Created Using TradingView via DailyFX

USD/CAD saw an uptick after rebounding from 1.3545. Resistance awaits at 1.3620, the 61.8% Fibonacci retracement level, with a push beyond aiming for 1.3700. Downside moves could test support between 1.3545 and 1.3535, potentially heading to the 200-day SMA at 1.3475 if broken.

Final Thoughts

In final thoughts, the U.S. dollar’s trajectory this week hinges on high-stakes economic data and Powell’s Congressional testimony. The mixed initial performance underscores the market’s uncertainty and cautious stance. As investors navigate through these pivotal events, the technical analyses of EUR/USD, GBP/USD, and USD/CAD offer valuable insights into potential support and resistance levels, guiding trading strategies amidst expected volatility.

Daniel M.

Daniel Moore is a seasoned trading analyst with over 20 years of experience navigating the ever-evolving financial landscape. Renowned for his unconventional yet effective approach, Daniel utilizes a blend of technical and fundamental analysis to identify hidden gems and craft winning trade strategies. He is a master at demystifying complex market data and translating it into actionable insights for traders of all experience levels.

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