After Fed's Waller endorsed a 25 bps rate hike for next week and said that "if markets are right about inflation", then that is "good news", the dollar is seen struggling since Friday as risk trades soared. And as we get the new week going, the greenback remains in a precarious spot as it sits on the brink of a further technical breakdown.
Let's get straight into the charts.
The weekly chart for EUR/USD displays best the bullish momentum in the pair since jumping back above parity in November. The upside run is extending further today, as price hits its highest levels since April last year just above 1.0900. Buyers are still eyeing the critical 1.1000 mark but before we get there, the 50.0 Fib retracement level of the downswing since 2021 to September last year will be a big level to watch as well - sitting at 1.0942.
GBP/USD tested the December highs earlier today but it looks like price is backing off at the first attempt. The high today hit 1.2447 with the December highs seen at 1.2443-46. For now, sellers are holding the line but it is a big level to watch before a potential breakout towards 1.2500 or higher next for the pair. That comes despite the pound's struggling outlook, all things considered.
USD/CAD is back down near the lows in the past few weeks, after having seen its recent upside push rejected by the 100-day moving average (red line). The recent lows around 1.3320-45 is in focus now and a further drop from there could see the downside momentum extend towards the November lows at 1.3225-35 next.
With equities also a key focus point as mentioned here, the antipodeans are also knocking on the door of a stronger breakout against the dollar at the moment. AUD/USD is back up to near a test of 0.7000, where the upside push is stalling for now despite the technical breaks above the 200-day moving average (blue line) and key trendline resistance (white line) from the June and August highs.
A push above 0.7000 will open up the path towards the August highs at 0.7125-36 next.
Likewise, NZD/USD is also pushing back up to retest the 0.6500 mark with daily resistance from the August high at 0.6468 being one to watch as well. This region has helped to keep a lid on gains for the pair since December and remains the big one to pay attention to at the moment, before further resistance is seen at the May and June highs around 0.6568-75 next.
