The U.S. Dollar Index mostly traded sideways last week and ended the week on a negative note near to the medium-term support. The Dollar index had given a flat opening this week on the back of the extended Easter holidays.
This week is expected to be a tough week for U.S. Dollar due to worries over the recent President Donald Trump’s tariffs which had created negative sentiments in the market where everybody is afraid of the negative impact of a potential trade war.
The Greenback is technically looking weak and it is showing signals of a potential bearish movement in near term we expect the coming week to be volatile for Dollar Index and if the Index will cross the support zone near 88.00 levels in coming trading sessions then it may again turn negative and reach near to the level of 86.00 in coming future.
However the movement in the U.S. Dollar Index is largely depends on the development of the President Donald Trump’s tariffs plan and a potential trade war, if the development in this matter turn to be beneficial for US manufacturers and business and the tension between the US-China decreases it can give a positive push to the US Dollar.
But the possibility of a positive development is still not visible as the factories use steel and aluminum as raw material are already under pressure as a recent data published by the Institute of Supply Management manufacturing survey showed that the price of raw material paid had reached to a seven-year high in March majorly affected by the tariff announcement.
Last week was a volatile week for Euro where the currency gained bullish momentum in the starting of the week due to the negative performance of US Dollar but lost ground in the middle of the week and traded majorly with bearish sentiments settled off the gains made in the starting of the week and gave negative closing of the week.
This week is also expected to be a tough week for Euro as in the absence of any major economic event this week the majority of the movement will derive from the movement of U.S Dollar which can keep the movement of the pair in a tight range.
Technical outlook: On the technical ground the EUR/USD pair is trading sideways between the medium term Support and Resistance zone near 1.2150 and 1.2500 respectively.
In short term the EUR/USD pair is showing signals of a potential bearish movement which can push the price to test the support zone near 1.2150 levels, however, the support is strong and it can give bulls a chance to push the price again up and close the week on a positive note.
The pair USD/JPY had given a sharp recovery and majorly traded with bullish sentiments as the strong bullish movement of USD and weak Demand of Japanese Yen due to the news by from China that the North Korean leader Kim Jong Un had pledged his commitment to denuclearize and meet U.S official had decreased the demand for Japanese Yen with is said to be a safe haven asset.
Technical outlook: On the technical ground the USD/JPY pair is trading at a very crucial level and if it cresses the support zone near consolidating 105.00 levels again this week then it can reach near to the level of 102.50 in coming trading sessions.
However fundamentally the decreased demand for safe-haven asset and a potential bearish movement in USD is creating a confusing mix of sentiments which can result in an unpredictable week ahead
The pair had managed to give a slightly bullish movement in the starting of last week and tried to test the resistance zone near 1.4250 levels and ending of the week on a negative note after making a weekly high of 1.4246. The short-term downtrend in the GBP is still on the move and the pair can test the support line powered by the long-term bullish trend near to the level of 1.3860 levels in near-term and continue its long-term bullish trend.
However, the break of this support can result in a deeper correction in the GBP/USD pair as the Pound is still not strong and the overall sentiments for the pair are still negative on the back of the Political concerns and the start of the Brexit final negotiation which can put bearish pressure on the pair.
In line with other pairs, the USD/CAD pair also had given a sideways movement last week with very less volatility in the pair. With a negative GDP number USD/CAD pair managed to give a flat closing of the week above the support zone of 1.2800.
Technical outlook: On the technical ground the pair had tested its near-term support zone near 1.2800 levels and it is currently trading in a range. The pair is expected to continue its sideways trading this week also in the absence of any major economic event this week apart for Friday when Federal Reserve chairmen Powell is going to give another speech along with employment and earnings data for both US and Canada which is going to release on Friday.