The US Dollar initially experienced a decline following the Federal Reserve’s dovish decision this week. However, it bounced back after the Swiss National Bank’s surprise rate cut and a dovish decision by the Bank of England yesterday. As a result, it approached this week’s high, which should be closely monitored.

The Index is currently trading above its key resistance levels of 103.65 and 104.00. The weekly close today is crucial as it could indicate the end of the downside trend and the beginning of a new trend, provided there is a weekly close above those levels. However, the Fed Fund Futures still suggest that there is an 80% chance of a rate cut by the Federal Reserve in June.

On the other hand, US equities are still rallying and posting new record highs. Although this rally may be overstretched, there are currently no signs of weakness.

EURUSD near 1.08

The Euro once again failed to stabilize above 1.09, resulting in a further decline that breached the 1.0850 support area and dropped to as low as 1.0830 earlier this morning.

Despite this, the technical indicators still suggest a bullish outlook. However, if there is a weekly close below 1.08, it could be an early sign of a trend change, which may result in another drop to around 1.07 next week.

As such, traders should pay attention to today’s weekly close, and a recovery above 1.09 would indicate that the bullish outlook remains unchanged.

USDJPY remains at key resistance

Over the last three days, USDJPY made several attempts to surpass the key resistance level at 151.70. However, it hasn’t been successful so far. This move has increased the likelihood of an intervention by the Bank of Japan, especially after their recent decision to end the negative rates era.

In the coming days, a verbal intervention is highly possible, and if unsuccessful in pressuring USDJPY, an actual intervention is likely.

Gold rejected $2200

At the start of yesterday’s trading, Gold surged to $2222, however, it failed to maintain these gains and closed lower at around $2200 with a bearish shooting star on the daily chart.

Before the uptrend resumes, a downward retracement could occur. Watch support areas at $2160 and $2147.

A breach of these levels would signal an extended Gold retracement towards $2100 and $2000.

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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